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Talking to the tax man

As I noted in our story last week on offshore businesses scamming the GST rules, retailers and distributors will need to act in their own interests to get the ATO to end blatant examples of GST avoidance like the one outlined below.

Here’s yet another example of the kind of practices the ATO could be looking at: The company with the lowest price here – $2159 – is Oz Digital Online (via Ebay). Oz Digital Online gives the impression it is Australian-based. (The business name, ‘Item Location: Sydney’). But, ‘during periods of high demand we may run out of stock in Sydney. In order to avoid delay, we will pay the extra postage costs to have your item sent from our international office in Hong Kong, no extra duty or tax for Australia customers all paid by us.’ So they are picking up the GST? Oz Digital Online must be enjoying high demand on a daily basis, as its delivery times are consistently three weeks or more – ie, EVERYTHING seems to come from HK. But as an Australian business it should be charging GST nonetheless, and providing tax invoices. Legitimate Australia retailers haven’t got a look-in competing on price.  (Source: www.digitalcameraworld.com/au).

While other consumer goods wholesale/retail industries have industry associations to ride shotgun on their interests, the photographic industry most assuredly does not. While IDEA has the resources – $400K in the bank –  to represent the industry’s interests, it lacks the energy and leadership.

The exchange below is the kind of activity an industry association worth the name would be engaged in until the issue was sorted out. Not rocket surgery. Likewise, getting key messages out to the general public. The Coronavirus lockdown provided a unique  platform for a dynamic industry association to remind people they had time to get their photo collections in order and hey, maybe get some prints or photo books or even wall decor made. Even buy a new camera.

Next pandemic, perhaps?

Anyway, here’s an example showing that while the ATO is pretty pleased with its efforts on collecting GST on sales from overseas, it probably shouldn’t be:

Email to Adorama customer service:
Hi. I have an order ready to complete on an Olympus E-M10 II camera (see below right). Just a couple of questions: Price is $314.95 plus shipping. I am in Australia and linked to this promotion from a local photo news website [www.digitalcameraworld.com/au]. Is that price US or Australian dollars? Also, there is no GST included – my understanding is that overseas retailers are required to collect Australian GST to sell into Australia – does this apply to Adorama?

Taxman Adorama
The best deal here, from Adorama, is in US dollars, and Adorama does not charge GST as required by law. So who needs an industry association?! (Source: digitalcameraworld.com/au).

Response from Adorama:
Please note that our website will be posting prices under US Dollars.

…Unfortunately, we are not able to estimate all costs when shipping internationally. When you place the order online the shipping cost will appear in the shopping cart at checkout. This is the cost for transporting the item only; any additional taxes, duties, or surcharges may be due upon delivery and cannot be calculated.

The recipient of an international shipment may be subject to import duties and/or taxes which are levied by the importing country once a shipment reaches your country AND brokerage fees or custom clearance charges which may be imposed by the carrier. These charges must be borne by the recipient; we have no control over these charges and cannot predict what they may be. You may contact your local government or customs agency to get an estimate of these charges. In the event a shipment is refused and returned, any taxes, duties, custom fees, brokerage fees or shipping charges incurred from this return, will be the responsibility of the customer.

This information is always on our Help page and is also sent in your order confirmation.

Sincerely,

Adorama Customer Care Associate

Email above forwarded to ATO Media Unit with this note:
Hi,
FYI – This company freely admits it does not collect GST for low value sales to Australia…
Best regards,

Inside Imaging

Response from ATO Media Unit:
Hi Keith,
Thanks for your email. Are you looking for a comment or are you happy for me to pass it along to the relevant internal area?

Kind regards,

ATO Media Unit

Inside Imaging to ATO Media Unit:
Hi ,
My understanding is that you wouldn’t be able to comment because this is identifying a specific company.

If that isn’t the case, it would be interesting to understand how this policy of Adorama’s of blatantly not collecting GST sits with the ATO describing its efforts to date on low value GST collection as ‘exceeding expectations’.

– Given that is the case, it would be great to at least know this has been passed on to the relevant group within the ATO. I can then follow up in a few months knowing that the ATO has been definitely apprised of the situation.

Best regards,

Inside Imaging

ATO Media Unit to Inside Imaging:
Hi Keith,
I’ve confirmed with a colleague and they indicated the best way for this information to reach the right area is to complete an ATO tip-off form at www.ato.gov.au/tipoff.

As stated on our website, due to privacy laws, we won’t be able to inform you of the outcome of the information you provide. As mentioned when we spoke during your first enquiry we can’t comment on individual companies. My comment below referred to whether you were seeking a formal statement that you could attribute to an ATO spokesperson.

I would encourage you to complete the form.

Kind regards,

ATO Media Unit

 

No, I won’t be filling out that Tipoff form. But if you were an Australian camera distributor, why would you not go into bat for your retailer network by bringing instances like this to the attention of the ATO? Squeaky wheels and all that. 

If you were a retailer with the resources to monitor these kinds of issues (thinking Camera House, Teds, DCW, DigiDirect, here) why wouldn’t you be filling out one of these forms on a weekly basis? Adorama isn’t the only overseas business giving the ATO a two-fingered salute, as we indicate above.

 

 

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