Streaming Orange Is The New Black is about to get more expensive if you live in the land down under. To make sure that streaming providers charge consumers goods and services taxes, Australians will now have to pay extra to stream online content in a new proposal dubbed the "Netflix tax."
Australian treasurer Joe Hockey announced on Tuesday that the tax on Netflix and other digital services will be introduced into the 2015 federal budget.
The "Netflix tax" will have Australians pay an extra 10 percent for digital goods such as movies, games, music, software and ebooks bought on any streaming platform.
Currently, Australians do not pay goods and services taxes (GST) for online purchases that are under $1000 AU. Netflix stated that it will add the GST when the government passes it, which will increase the cost of the popular streaming service to about the same amount as other streaming services like Presto and Stan. These locally-owned streaming services already charge a tax.
However, the new tax won't increase the price for iTunes purchases since Apple customers in Australia already pay GST on downloads.
The "Netflix tax" will help eliminate multinational companies from avoiding taxes and ensure "a level playing field" in the country, which will save the Australian government about $1 billion lost from online sales.
'It is plainly unfair that a supplier of digital products into Australia is not charging the GST whilst someone locally has to charge the GST,' Hockey said.
Hockey also revealed that at the new legislation may expand outside Australia. "A number of other countries have or will introduce similar rules such as Japan, Norway, South Korea, Switzerland and member countries of the European Union," he said.
The "Netflix tax" is expected to raise $350 million over four years, with the revenue going to the states and territories, rather than the federal government. The legislation will go into effect January 1.
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