Amazon Responds To Australian Tax Action By Geo-blocking Australian Users

The US online retailing giant, Amazon, has announced that Australian shoppers had no longer access to its international e-commerce website, Amazon.com, from June 1. This change results from a new sales tax levied by Australian government.

Change of Goods and Services Tax Regime

From July 1, Australia will start collecting a 10 percent GST on overseas purchases under A$1000 which were not subject to tax before. This reform puts an end to the untaxed advantage of low-cost imported items. “If multinationals aren’t forced to pay their fair share of tax, they will have a competitive advantage over retailers here in Australia, on our own main streets and in our shopping centres”, said Australian Treasurer Scott Morrison.

Restructure of Amazon

In response to this new sales tax, Amazon decided to geographically block Australian shoppers from buying on Amazon overseas websites and redirect them to its smaller local platform, Amazon.com.au. The local website only offers about 60 million products while Amazon.com has about 480 million products available to the customers. Australians can buy overseas products through the “global store” option in the local website but need to pay the 10 percent GST for the purchase. This move frustrates Australian shoppers who are complaining about both thin product range in the local website and new GST levied by government. This may benefit Amazon’s competitors like eBay, which announced it wouldn’t cut access to the global purchase for Australia.

Sources: Reuters, ABC News, The Sydney Morning Herald, The Australian Financial Review

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