Amazon geoblocks Australia from US site as tax change kicks in

Amazon geoblocks Australia from US site as tax change kicks in

However it may also benefit Australian retailers which have been hammered by the rise of online shopping and had campaigned to have the GST apply to all goods shipped from overseas.

As of July 1, when the new rules come into effect and Australian consumers log on to Amazon, they will automatically be redirected to the Australian site.

As reported by sister publication ARN, the move comes after Australia's Parliament previous year passed new legislation that will see online retailers compelled to collect GST from Australian customers on overseas purchases worth less than $1,000.

Amazon said the change was in response to the Turnbull government's new online GST laws, which require overseas businesses to collect the tax on products under $1000.

Amazon launched last December in Australia, but it hasn't dominated the market like some predicted.

However, the company said that more than four million items previously only accessible from the US store would now be available to Australian shoppers on the local site.

Dr. Minifie, the economist, said that Amazon would probably continue to build a healthy customer base in Australia despite the change.

A source in Amazon stated: We understand that customers will face difficulty because of this step we initiated but we, being a global business with many worldwide websites must respect and go according to the legislation, with a further clarification that this was done not to avoid taxes but to go hand in hand with the legislation.

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Amazon did not explain its decision to geo-fence Australian users, but fellow online store eBay has not announced a similar measure.

Rival e-commerce platform, eBay, had previously threatened to block foreign sellers if the new GST laws went ahead. It also offered customers $20 voucher for their next Amazon.com.au purchase.

"If this happens in New Zealand, Kiwis will be denied access to about 500 million products, most of which are unavailable locally".

"Amazon's announcement demonstrates that Australian retailers are more than competitive with worldwide rivals when operating on a level playing field". Amazon.com.au has roughly a tenth the selection of Amazon's USA website, with about 60 million products compared to almost half a billion.

Since the local launch, Amazon has introduced a number of new products and services, including Alexa, Amazon Echo, Amazon Music Unlimited, and Fulfilment by Amazon.

Kevin Willis, the retail giant's director of global trade services, told the committee in his decades of experience with cross-border trade tax policy development, there "has never been a tax of this magnitude".

Although the Australian government aims to make the playing field more equal for all retailers, they have created a lot of unhappy customers. The GST will impose a 10% fee for all online goods imported into Australia, worth less than A$1,000 ($756).

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