The start of the new Australian financial years brings a number of changes to exporters to Australia should be aware of. Some changes are so significant that Amazon.com has said that it will no longer ship to Australian addresses. However, while there are increased compliance issues, there are also new benefits that exporters should be aware of.
Removal of the low value GST threshold
This is the change that is causing problems for Amazon.
Australia imposes a 10% goods and services tax on taxable importations. Prior to 1 July 2018 consignments with a value of less than $1,000 were not subject to this tax. This was deemed to create an imbalance between domestic suppliers and exporters. To address this, from 1 July exporters that annually make more than $75,000 of exports of low value consumer consignments to Australia will need to charge Australian GST on those exports.
There is no change where the low value consignments are to Australian businesses that provide you with their Australian Business Number (this is because these businesses receive a credit for any GST they pay).
If your business makes export sales to Australian consumers it is important that you understand the new provisions and your requirements around registration, collection and remission of Australian GST.
There is no change to the customs duty requirements. All consignments with a value of less than $1,000 will be duty free.
Australian food labeling laws
Australia’s country of origin food labeling laws move from a 2 year phase in period and become a mandatory requirement on 1 July. For products that contain no Australia content, the labeling requirements are relatively basic, the product is either labeled as “made in…” or “packaged in …”. If the “packaged in” claim is made there are different options about what can be said about the origin of the ingredients.
If any claim is made about the Australian content of the goods exporters need to be careful to meet the strict labeling requirements, this includes specifying the percentage of the Australian content.
It should be noted that the Australian regulator, the ACCC, has warned importers and retailers that it will be increasing its compliance activities in this area.
The extent to which placebos used in clinical trials are subject to customs duty has been a grey area. If classified as a medicine the placebos were duty free, if not, duty was payable. It was also difficult for importers where they did not know which imports were medicine and which were placebos.
This problem has been resolved and from 1 July clinical trial kits and placebos used in clinical trials will be duty free.
The third phase down of duty rates under the Expanded Information Technology Agreement commence on 1 July. The duty rates rate reductions are over a range of products in chapters 32, 35, 37, 39, 49, 84, 85, 90, 95 and 96. Australian duty rates range from 0-5% for most products. The reductions under the agreement bring some goods down to 0% while others reductions continue to be phased in.
Rates are based on tariff classification which some new classifications being created to accommodate the agreement. Traders unsure of the classification of their goods should seek a tariff advice from the Australian Border Force.
In times of changing regulations the key is to stay informed and proactively manage risks and opportunities.
This article does not constitute legal advice or a legal opinion on any matter discussed and, accordingly, it should not be relied upon. It should not be regarded as a comprehensive statement of the law and practice in this area. If you require any advice or information, please speak to practicing lawyer in your jurisdiction. No individual who is a member, partner, shareholder or consultant of, in or to any constituent part of Legally Yours Pty Ltd accepts or assumes responsibility, or has any liability, to any person in respect of this article.