According to the ATO, photographers who participate in online photography booking services – such as the Singapore-based, pronunciation-challenged Kodakit – could be liable for GST on work performed, even though it has not been charged to the end customer.
Kodakit, a wholly owned subsidiary of the once-great Eastman Kodak, serves as an online matchmaker linking businesses looking for cheap photographic services and local camera owners who have registered to be part of the
‘Changes to GST mean that services and digital products and low-value imported goods sold to consumers (broadly anyone not GST-registered) are subject to GST when provided from overseas,’ an ATO spokesperson told Inside Imaging.
‘In general, these rules do not apply to services supplied wholly within Australia by an Australian supplier.’
‘For any supplies, including services, physically carried out within Australia by an Australian supplier the standard GST domestic rules apply. Accordingly, businesses that meet the registration threshold need to register and account for GST. We are seeing many small Australian businesses finding their customers through websites or apps that are owned and operated by overseas suppliers.
‘…Even though a purchaser may request this service through an offshore supplier, the service is supplied and performed by the provider in Australia, and is performed wholly within Australia.
‘It is therefore the provider of the service that is responsible for any GST under standard domestic rules.’ (Our highlighting.)
Kodakit wholeheartedly agrees it’s got nothing to do with Kodakit: ‘Kodakit is a Singapore registered entity. We do not need to apply GST on your rate and we do not withhold any taxes from your rate either,’ Nancy from Kodakit Support explained to Inside Imaging. ‘You are responsible for your own tax reporting and payment. For further assistance, please consult your tax advisor.’
The ATO spokesperson drew an analogy between Uber drivers and their GST obligations and a photographer working via an outfit like Kodakit – in both instances the service is provided within Australia with fees collected from a business located offshore.
The GST issue is probably more theoretical at present, as Kodakit has so far failed in its modest ambition of ‘creating the photography ecosystem of the future.’ That clearly hasn’t happened. Instead low and slow payments have alienated photographers who have trialled Kodakit. However a more competent implementation of a Kodakit-like model could be rolled out in the future.
Kodakit takes a 20 percent clip of the agreed fee on the way though. Around $200 seems to be the kind of daily fee photographers are picking up. Clients own all rights to the purchased images.
Kodakit will potentially lead to a ‘race to the bottom’ in pricing, with amateurs who have no real investment in photography in a position to price themselves far lower than those who rely on it for a living.
Sharing economy: https://www.ato.gov.au/general/the-sharing-economy-and-tax/
Tried Kodakit? How was it for you? Feel free to share your experiences in our readers comments below…