Everyone is talking about the Netflix tax and how it’s going to cost more for consumers, however we haven’t seen much about how it will impact business event organisers.
A lot of Australian small businesses are annoyed over the “Netflix tax”, because it still has loopholes that allow multinationals to dodge tax responsibility, leaving them at a disadvantage.
It’s especially bad for event organisers who aren’t running highly sophisticated accounting services, who may not realise their responsibilities and can find themselves falling into the ATO’s bad books.
The Netflix tax will see overseas businesses pay GST on digital services provided to consumers only.
B2B transactions will not be included, meaning non-residential companies such as Eventbrite, Slack and Amazon will not charge GST to Australian event organisers, but will pass the burden of reporting this GST to them.
This means more compliance costs & admin for event organisers who are already doing it tough.
By classifying themselves as non-residential businesses (even if they have physical offices here), multinationals are able to shift the tax burden to event organisers instead.
Jeff McAlister, CEO of Australian online ticketing platform TryBooking, had the following to say about the whole situation.
“The government needs clear definitions on whether international companies have an Australian presence or not. Currently, it seems you can have a corporate office and staff on the ground but claim not to have a permanent establishment,” he said.
“The GST changes are just a reflection of this. If they have sufficient operations to warrant GST compliance, then the government should enforce that they are an Australian entity rather than allowing invoicing from the US or a low tax location to minimise corporations tax.
“The State Governments have welcomed and attracted multinational companies with large incentives to set up in Australia, and while it’s been great for boosting the economy and generating local employment, they should compete on an equal basis.
“If they have sufficient operations to warrant GST compliance, then the Government should enforce they are an Australian entity rather than allowing invoicing from the US or a low tax nation to minimise corporations tax.
“The Government and the ATO should also closely look at the service providers used in its internal organisations. It’s disappointing to see some government organisations using international services instead of supporting local businesses.
“By supporting organisations who inevitably take dollars offshore, the Government is sending a message to Australian businesses that they are not a priority,” he said
“At TryBooking, our focus is on providing the best value and technology to Australians. We’re community focused at our core and we’re dedicated to operating as an ethical, transparent business. We’re proud to have an outstanding client base who share our values and support the community.”