Budget confirms Netflix Tax, adds tech tax writeoffs

By May 13, 2015 News

Are you a fan of ? How about a 10% increase in the costs of all digital good purchased online? Treasurer Joe Hockey announced last night at the Budget 2015 that all corporations that provide digital products to consumers or businesses in will be subject to the new GST Tax.

This news comes as a positive change to small businesses currently engaging in online services such as Google Adwords and Facebook advertising. Where currently they cannot claim the input tax credit back on purchases (such as online advertising) through their books. Computer Fixperts currently utilise online advertising through Google Adwords and Facebook for our computer repairs services in Brisbane.

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As expected, last night saw the formal announcement of the so-called “Netflix Tax” on digital products or services imported by Australian consumers into Australia.

The budget frames the tax as both a revenue raising measure and a way to equalise the market for Australian businesses in a competitive sense, with the budget papers stating:

“Under the current law, digital products and services imported by consumers are not subject to the GST. This results in forgone GST revenue to the States and Territories and places domestic businesses, which generally have to charge and remit GST on the digital products and services they provide, at a tax disadvantage compared to overseas businesses.”

It wasn’t just the Netflix tax that was raised in last night’s budget, with Federal Treasurer Joe Hockey also abolishing Fringe Benefits Tax on portable electronic devices used for work purposes. So if your business provides you with a phone or tablet, you shouldn’t pay FBT on it any more.

Small businesses — those with a turnover of less than $2 million — will also be able to immediately depreciate purchases up to $20,000 each, including technology purchases.

 

Summary of the Budget 2015 from ABC News: