Australians will soon be unable to shop from Amazon’s international sites after the global e-commerce giant followed through with its threats over the introduction of a new tax on online purchases.
From 1 July, Australians trying to access the US Amazon site and any other international Amazon site will be redirected to the local Australian version. This is also the same date the government’s new legislation on online tax comes into effect.
Under the new rules, online retailers will be forced to apply 10% GST to all online purchases being shipped to Australia from overseas vendors.
Buyers pay the tax, and the retailer collects and forwards the money to the Australian government.
Currently, GST is only applied to purchases of $1000 or more.
An Amazon spokeswoman confirmed today that Australians would be locked out of US Amazon.
“While we regret any inconvenience this may cause customers, we have had to assess the workability of the legislation as a global business with multiple international sites,” the spokeswoman said.
To comply with the new tax rules, Amazon would have had to track and apply GST to all Australian purchases from overseas transactions.
The company has instead opted to entirely shut Australians out of any international Amazon platform.
Australians looking to shop from overseas Amazon websites will now have to use a VPN and have the products first shipped to a location in the US or UK.
Amazon has also launched a new “global store”, allowing Australians to access a further four million items that were previously only available on the US platform.
“Based on our assessment, we will redirect Australian customers from our international sites to amazon.com.au, where they can shop for products sold by Amazon US on the new global store, available today,” the Amazon spokeswoman said.
“This will allow us to provide our customers with continued access to international selection and remain compliant with the law which requires us to collect and remit GST on products sold on Amazon sites that are shipped from overseas.”
But Australians will soon be unable to access the vast majority of the 500 million products on offer on Amazon internationally.
The government passed legislation for the so-called ‘Amazon tax’ in June last year in an effort to “level the playing field” for local retailers and bricks and mortar shops.
A subsequent Productivity Commission report on the laws concluded that they were “imperfect” but the best option of those currently available.
In its submission to the report, Amazon labelled the new tax as “fundamentally flawed” and threatened to simply block Australians from shopping from international vendors.
The global giant instead proposed that delivery companies like Australia Post should be responsible for collecting such a tax.
This was quickly rejected by Australia Post as being “unfair”.
The ‘Amazon tax’ was first flagged by the federal government in its 2016 budget, and is expected to generate $300 million over the forward estimates thanks to the new measure.