The electronic commerce and cloud computing giant Amazon has announced it will stop shipping to Australian customers. The news is in response to new tax laws on online purchases, the company said Thursday. The new rules require internet retailers like the giant American company to collect a 10% goods and services tax on everything bought from sites that are overseas beginning July 1. The new tax also includes the current tax-free threshold of AU $1,000 (US $760).
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In place of Australians access to the international Amazon website, the company will still offer it's Australian customers access to its smaller Australian site. The only thing is the Australian Amazon site has far less for sale. Amazon said in a statement, "While we regret any inconvenience this may cause customers, we have had to assess the workability of the legislation as a global business with multiple international sites."
The company also announced it would be compensating by opening a "global store" for Australians which would add another four million items that were exclusive to its American website. "This will allow us to provide our customers with continued access to (our) international selection and remain compliant with the law," the statement said. The new tax rules were the result of years of lobbying by struggling local retailers which have to apply General Sales Tax to all online and store sales making competing with Amazon nearly impossible.
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Amazon launched an Australian version of its site last December which shipped from a warehouse in Melbourne. The company expects to add another warehouse in Sydney soon. Treasurer Scott Morrison said he expects the new laws will "level the playing field for Australian businesses." Morrison added, "The government doesn't apologize for ensuring multinationals pay a fair amount of tax here in Australia.
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