The Australian government has introduced new GST legislative changes, some of the changes commenced earlier this year with further changes due to commence in 2018.The new GST laws may have a direct affect on your supplies or services being made to Australian businesses and consumers. As such, the team at Grant Thornton Australia have provided an outline of the changes, and how it may impact you. - GST cross-border transactions B2B - GST to digital products and supplies B2C - Low-Value Threshold (LVT) Changes - Significant Global Entity Penalties

1. Australia GST
Changes
Grant Thornton Australia

2. 2 Grant Thornton Australia
Overview
The Australian government has introduced new GST legislative
changes, some of the changes commenced earlier this year with further
changes due to commence in 2018. The new GST laws may have a
direct affect on your supplies or services being made to Australian
businesses and consumers.
As such, the team at Grant Thornton Australia have provided an outline
of the changes, and how it may impact you.
Significant Global Entity
Penalties
GST cross-border
transactions B2B
GST to digital products and
supplies B2C
Low-Value Threshold (LVT)
Changes

3. 3 Grant Thornton Australia
GST cross-border transactions
Under these changes, certain
business-to-business (B2B) supplies
by non-residents will no longer be
determined to be part of the
Australian GST system.
In summary, the B2B measures
broadly :
• Modify the test for when an
enterprise is carried on in the
Indirect Tax Zone (ITZ)
• Allow non-resident suppliers to
not have to account for GST on
certain supplies of intangibles
(e.g. non-goods) in the ITZ;
• Treat the importation of goods
and the related installation /
assembly of the goods by non-
residents as two separate
supplies, resulting in potential
disconnected supply treatment.
• Apply GST-free treatment where
a non-resident makes certain
supplies to another non-resident,
for the purpose of an enterprise
carried on outside the ITZ
• Remove the requirement for non-
residents to register for GST if
they only make GST-free supplies
• Change the way in which the
values of taxable importations are
calculated, such that an uplift
factor may be applied rather than
requiring actual transport and
insurance costs.
These changes are already effective,
and have been since 1 October
2016, subject to a transitional period
rules for contracts that span this
date.

4. 4 Grant Thornton Australia
GST to digital products and supplies
The new measure has been badged the
‘Netflix’ tax and will affect supplies of
services made by non-resident
suppliers to Australian consumers. The
tax is predominantly targeting non-
resident suppliers engaging in business-
to-consumer (B2C) transactions.
The changes level the playing field
between resident and non-residents
suppliers of intangibles performed
outside Australia (e.g. services, digital
products). Previously, non-resident
suppliers did not have to charge and
remit GST on the provision of digital
products and services they provided.
This gave these entities an advantage
over resident entities required to charge
GST on the same services. Under the
changes these non-resident entities will
now be required to register and charge
and remit GST
Similar changes have already been
implemented by other tax authorities
across the globe in line with the OECD
VAT/GST guidelines.
There is the option for suppliers affected
by these rules to shift the responsibility for
GST liability (in some circumstances)
from the supplier to the operators of
electronic distribution platforms. Further,
where entities are making intangible
supplies that are only connected with
Australia, they have the option of
becoming limited (rathe than regular) GST
–registered entities.
These changes are effective 1 July 2017.

5. 5 Grant Thornton Australia
Low Value Threshold Changes
The Australian Government on 21
June 2017 passed amendments to
the GST Law that requires
overseas retailers with an
Australian turnover of AUD 75,000
or more to register and remit GST
on the importation of goods valued
less than $1,000 to Australian
consumers (vendor collection
model).
Currently, there is an existing
threshold where GST is collected
on imports at the border on goods
above AUD $1,000 only. The new
changes remove this threshold and
GST will subsequently apply to all
imported goods by consumers.
Under the proposed new vendor
collection model the non-resident
goods suppliers (as well as online
marketplace services such as eBay
and Amazon and/or 're-deliverers'
of overseas sourced goods) will be
required to collect and remit the
GST applied to the importation of
the goods.
The topic has been one of high profile
interest amongst the relevant
stakeholders with the Government now
reviewing its proposed collection model
However, it seems likely that the
Government’s preferred (yet
controversial) vendor collection model
will be implemented.
Originally planned to be implemented
on 1 July 2017, the law now provides a
12 month delay to enable businesses
more time to prepare for these new
GST requirements.
The premise of this legislative change
is again to even the playing field
between overseas businesses and
Australian business.
These changes are effective 1 July
2018.

6. 6 Grant Thornton Australia
Significant Global Entity
The Australian government has
recently passed into law significant
increases in penalties that apply to
significant global entities (SGE).
Broadly, an SGE is an Australian
resident entity that is a member of a
larger global group with annual global
income greater than AU$1 billion.
These penalties will apply to the late
lodgement of documents to the tax
authority, including income tax returns,
activity statements, Country-by-Country
Reporting documents and general
purpose financial statements. The range
of penalties applicable to SGE’s with
effect from 1 July 2017 is set out in the
following table:
Days Late New Penalty Amount AUD
28 or less $105,000
29 to 56 $210,000
57 to 84 $315,000
85 to 112 $420,000
More than 112 $525,000

7. 7 Grant Thornton Australia
Tony advises clients throughout Australia and works with
global colleagues to reduce the marginal cost, and
streamline the management of indirect taxes affecting their
business or transaction.
He has fifteen years’ experience providing specialist tax
services with a particular focus on GST.
He works collaboratively with his clients to find solutions and
areas where cost savings can be made. Tony is well
regarded for his ability to provide practical advice to his
clients in relation to the management and risks associated
with indirect taxes.
Offering expertise across the broad spectrum of specialist
tax services, Tony also assists his clients in dealing with the
revenue authorities.
Chris Jenkins
Partner
T +61 8 9480 2157
E chris.jenkins@au.gt.com
Tony Windle
Partner
T +61 7 3222 0381
E tony.windle@au.gt.com
Andrew Barrah
Partner
T 61 3 8663 6063
E andrew.barrah@au.gt.com
Chris has more than 22 years’ experience both in
implementing GST systems and providing GST advice and
business structuring for privately held and listed
organisations in Australia, the United Kingdom and
Malaysia.
Chris provides a full suite of indirect tax consulting and
advisory services to his clients across a number of sectors
with a particular focus on Real Estate & Construction,
Government, Energy & Resources, and Not for Profit.
Chris has presented regularly on GST topics for the Real
Estate Institute of WA, the Taxation Institute of Australia and
the Institute of Chartered Accountants of Australia.
Andrew has 20 years of Indirect Tax experience and leads
Grant Thornton's Australia Indirect Tax Data Analytics team.
Andrew’ focuses on utilising Grant Thornton's Global Tax
Technology team to deliver data analytics and GST
diagnostics solutions to clients to highlight GST risks and
value chain opportunities.
Andrew also leads our Financial Services GST practice and
previously spent 12 years as Head of Indirect Tax at ANZ
Bank where he was responsible for all GST compliance and
systems control.
Andrew has also gained valuable experience with the ATO’s
integrated co-operative compliance model having managed
extensive ATO reviews of complex cross border GST
processes.
Andrew speaks regularly at Australian and International
conferences on GST / VAT.
Our Specialists

8. 8 Grant Thornton Australia
Grant Thornton recognises growing companies face
many challenges in a rapidly changing global
environment, including advances in technology,
access to government programs and globalisation.
We help companies to improve cash flows, enhance
performance, enter new markets overseas and
manage their tax affairs, amongst many other
services.
Our specialist GST team have the commercial, tax
and government expertise to help you get the most
from your business operations.
At the heart of our approach is our belief that the key
to success is in developing authentic relationships.
Grant Thornton places significant importance on open
dialogue and mutual trust and we would continue to
treat you as a very valued and important client of the
firm.
We would be happy to discuss any aspect of our
presentation with you further. Please do not
hesitate to contact any of our specialists with any
queries.
Our Commitment

9. Grant Thornton Australia Limited ABN 41 127 556 389 ACN 127 556 389
‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory
services to their clients and/or refers to one or more member firms, as the context requires. Grant Thornton Australia Ltd
is a member firm of Grant Thornton International Ltd (GTIL). GTIL and the member firms are not a worldwide partnership.
GTIL and each member firm is a separate legal entity. Services are delivered by the member firms. GTIL does not provide
services to clients. GTIL and its member firms are not agents of, and do not obligate one another and are not liable for
one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant
Thornton Australia Limited ABN 41 127 556 389 and its Australian subsidiaries and related entities. GTIL is not an
Australian related entity to Grant Thornton Australia Limited. Liability limited by a scheme approved under Professional
Standards Legislation. Liability is limited in those States where a current scheme applies.