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Then you might want to read your own post again considering you did sound pretty informed on their size. To save time: it is an ISP in HK, larger than you in AU.
Sure, if you want to pay your gov more than they actually deserve by the law... your choice i guess, more simple handling maybe also. Economically for you personally most likely a bad idea.
Let's not forget that the US does similar partly. I paid tax for 1m2 of space in Texas (which my provider gave my data to) for colo and US citizens pay federal tax at home even if living abroad (mostly, exceptions in place with dual taxation treaties), basically just to keep the citizenship (no EU country does this at all.)
If you have hardware in an EU country you generally are at least liable to pay import tax, sure, as US company you are likely safe and do not need to fear processing loss or similar if you do not collect VAT but you cannot complain if $EUCountry says you have to leave then either (or they keep your hardware as payment and it ends up here.)
I do not pay Telstra in Asia GST, yet they are incorporated in AU and the service is provided from AU contract, billing and support wise - So i see no reason that you should be wrong either. The field is 0% on the invoice.
Again, you may be right about the theory concerning GST in Australia (I couldn't say).
My reasoning is based on analogous examples that I'm more familiar with (the EU, the US). For example, it would seem bizarre for the US (or California) to charge California sales tax to an individual residing in the EU who orders a server in Los Angeles. Ultimately, this is what the analogue would be if your interpretation of GST in Australia is correct (or so it seems to me).
But it may be that GST in Australia really is different in this respect and so my parallel reasoning is faulty.
Except as I said I take advice from people who actually deal with those laws for a living and are paid good money to interpret it accurately. Not people who aren't even doing business here so are basically just coming to conclusions based on their own wishful thinking or a quick skim of some website... :-)
So let me guess, the service you pay Telstra for is in Asia. Not Australia... See the missing link as to why you aren't paying GST yet?
Well I am not sure I'd call 10 years of business experience in Australia "theory" but that's OK. Everyone is free to have their own reasoning, opinions, interpretations or understanding of the GST requirements, then when you actually start doing business here and get professional advice you can just do what is correct and no longer theorise about it. :-)
How's the weather today at Disney World?
No idea, can't afford to go because I am too busy collecting GST.
Sure, I'm not saying they should go "gray" and pray they're not found. You can setup a legal local presence that owns everything and provides services to the parent company etc etc etc
tl;dr: taxes suck.
@DaveA is awesome enough for a 10% tip.
SUCKS TO BE YOU
If you use http://ovh.ie/ or https://www.ovh.com/us/ which will take anyone from AU or NZ you are tax-exempt as those are VAT regions and they give anyone like me who's from the US VAT exemption in their systems
You will have to pay in the US Dollar or Euro, but the prices may still be cheaper than AUD with GST, you can calculate this yourself as well and also compare it to your banks exchange rates, or paypal's exchange rates.
For example: OVH VPS SSD 1 is offered at $3.49USD/month. In OVH.com.au the VPS SSD is offered at $4.99AUD (without GST which may be applied at checkout).
If you bought the VPS SSD 1 from the US site $3.49USD -> AUD is 4.73 Australian Dollar firm. so you'll actually end up saving money either way. I use PayPal do to my money conversions, however if you use your Australian bank debit card your results may be different.
Make sure if you want to make a USD tax-exempt account you use this link: https://www.ovh.com/us/support/new_nic.xml?redirectTo=https://ca.ovh.com/manager/#/configuration
Make sure it says "/us/" in the address bar, as if you go to ovh.com.au and make an account it will make your account with OVH Australia and you'll be paying GST in AUD. If your email is already registered with an account at OVH Australia, you'll need to use a new email to make your OVH US account.
right hand drive ford focus, for example, and yes I know this is a joke lol
That could also be called a UK/England model car, or a Japan one as well except I don't think ford exists in Japan but I could be wrong
NZ, HK and AU, so no, this is applicable either way to at least one location i have services in (if not 2 with NZ agreements in a way). My service in AU, that plugs into another cable there but not much more, is provided and ending in AU.
Tax lawyers go to jail pretty often actually and provide a lot of wrong advice, if you ask 3 you likely also get 2 different positions... and "good" money is not what you imagine, good money for a tax lawyer with connections in EU can go to the 2k/hr area (and means flying to Brussels...), not the 250$ your accountant/semi-tax-lawyer takes. Major difference.
I also do business in AU, just not having an AU company as it is pointless to me - i incorporated, like anyone sane doing business in Asia (or in my case mostly NZ), in HK. You have no choice (or think you have none, which is not true either, you could reduce your tax burden but do not ask your accountant/tax 'expert' the right questions).
So yes: you very certainly pay your gov more than they deserve on paper, hell if you even make a single cent profit per year you do this already while loss on another company... ahhh ask your $lawyer, they can explain you why.
DO/Vultr have US companies that provide services out of DE, if not paying VAT DE can throw them out, regardless if they incorporate in EU or not. No legal recourse.
The muscle cars are very popular in JP though the gasoline prices...
http://www.ford-service.co.jp/
@William, it doesn't matter how your service is setup though. Telstra (whether their domestic arm or the Global service which last I saw is HK based also) is not at a level where they can misbehave with the rules in any jurisdiction so if you aren't paying GST on a service it's because they don't need to charge it on that specific service based on the understanding of the law that company has, not because you are smarter than everyone else and have somehow magically avoided it through your own company arrangements in Hong Kong or wherever else.
This thread is about GST which companies regardless of their location can be registered for and do not pay - they are reimbursed it! They just collect it and pass it on to the government. The end user pays this tax only. I don't pay a cent of GST in Australia of course. I do collect it and pass it on as required by any business registered for it.
Everyone on this forum knows you like to play things on the edge with your attitude of knowing everything better than anyone else. It hasn't always worked for you. Perhaps the tax lawyers you associate with also behave in this manner and "go to jail pretty often" in whatever country you are in now - but financial services in Australia is probably one of the most highly regulated industries now and people in these fields don't go to jail often at all. That is such a ridiculous comment and just proves you basically don't know how business or financial services work in Australia. Also I doubt you can get a accountant or semi tax lawyer or any lawyer for that matter in Australia for $250 (presumably you meant per hour) anymore.
It is really a bizarre law. We import and export since 1997 and we know a lot of taxes and laws about it, and at least in Mexico, it is the same as you. It is really a weird law from AU
I do not think that's how Australian GST works. GST is basically a consumer tax collected by business (with Australian presence) on behalf of Australian government, from Australian consumers, regardless the origin of the goods and/or services. Therefore
Therefore if you do not reside in Australia and buy an Australian VPS from Vultr, you should not have to pay GST. Likewise most overseas customers buying Australian goods & services can claim the 10% GST back (see TRS refund in the airports).
It is definitely related to the import tax change from 1 July, where previously $1000 tax-free will no longer apply. Therefore large overseas vendors such as Amazon or eBay have to start collecting GST at checkout from Australian customers on behalf of AU government, regardless where the goods are free.
Likewise if you are from outside Australia and purchase VPS from Oliver / RansomIT, you should not have to pay the 10% GST, as he has to record that as a sale to foreign entity on the account.
It has no effect on Australian business purchasing VPS, because you can claim that 10% back during quarterly BAS (if the business is registered for GST as well). It's mainly the individuals that have to pay more.
Moreover, it's nothing new as companies such as Amazon Web Services have been collecting GST from Australian customers for a while.
https://aws.amazon.com/tax-help/australia/
@scotty but you are wrong to say that it's just "from Australian consumers" or "regardless the origin of goods and/or services". Otherwise:
a) every foreign tourist here would not pay GST on everything that they buy while visiting - they do and can't for example claim the 10% GST back on their hotel bill or their domestic flight or their meals while visiting
and:
b) Australian business with services sold from other locations to Australians would have to charge GST - I don't charge Australian consumers 10% GST for services they buy from my business in New Zealand (where I have presence).
It is a "consumption tax" for any end users buying goods and services consumed in Australia.
Your belief about who my business charges GST for and for what to is not what I have been advised by professionals. The services Ransom IT provides from Australia are consumed in Australia so GST is charged to anyone buying them. I actually misunderstood this (as I believe many people here do for whatever reason) early on; and was not charging foreigners GST for services in Australia by default or after they queried it. After receiving professional advice I was informed this was incorrect and that I had to charge GST on all my services from Australian locations since it's considered "consumed" in Australia. It is not removed from Australia to consume elsewhere (which would be exporting it and then make it GST free).
It is not wise to make assumptions about these things and surely anyone can appreciate that as someone having been in business for over a decade and registered and submitting BAS each quarter I would take advice from professionals over some end consumer online who probably just wants a discount and doesn't really care if I am doing things according to the letter of the law. :-)
Technically perhaps the only way I could get away with supplying a service from Australia to a foreigner and not charging GST would be by restricting that service so that it was purely accessible to foreigners only and not usable in Australia. However I suspect this would not be a useful service for anyone with a VPS located in Australia in any way and am not sure who would desire this for a 10% saving...
The TRS refund is obviously because the person is taking the good/product out of the country, so of course it makes sense then to refund it. :-)
Note my business also has a presence in New Zealand where GST is 15% but isn't required to be registered for GST there since the volume is too small. I don't collect GST for services there; but have to pay it for NZ based supplies and I don't get this back. That's why I charge more for services in that location; since it essentially cost me more to do business there. If I were to register for GST there the situation would likely change.
@Oliver: My understanding of the GST law is basically the one summarized by @scotty. If you look at the various official statements, for example,
https://www.ato.gov.au/Business/International-tax-for-business/In-detail/Doing-business-in-Australia/New-Australian-law-applying-GST-to-imported-digital-products-and-services/
they say that GST must be paid by "Australian consumers", where "Australian consumers are Australian residents who are not registered for Australian GST." I haven't yet found an official statement that says that foreigners will have to pay GST for digital products/services originating in Australia.
In short, the GST law seems to apply to Australian consumers who purchase digital products/services that originate abroad from companies that do business in Australia, and not to foreigners who purchase digital products/services that originate in Australia.
This is an interesting understanding of "place of consumption", but I don't think that it's the usual one in other parts of the world. Again, if a EU resident rents a VPS in Los Angeles, the understanding is not that the EU resident "consumes" the VPS in Los Angeles but rather that the "consumption" takes place in the EU.
At the same time, I concede that one could also argue that the "consumption" takes place in Los Angeles. It's just that -- traditionally -- the "place of consumption" is tied to the physical presence of the consumer.
If your understanding of "place of consumption" is the legally accepted one, then, yes, I guess that foreigners should pay GST if they order a VPS from you. Be that as it may, as far as I can tell, the GST law does not at all address this question, precisely because it's addressed to Australian consumers.
@angstrom well I can't speak for anyone else here but I have my business at stake so as I said I take advice here from professionals and don't draw conclusions from what I read on a forum on the internet or my own interpretation of what the ATO website says since as already shown by multiple replies in this thread people can conclude things in different ways or interpret it in a way they wish.
If others wherever they are with whatever business interests they do or don't have in Australia 'understand' things to be different that is their prerogative. This really isn't that different from any legal topics, or in fact dealing with anything that I am not confident to understand 100% and where the risks of getting it wrong are high; you outsource to a specialist.
All this online service stuff is a bit blurry and you can argue lots of different things (clearly). But if you actually run a business here that provides your livelihood then you don't take risks and do what you are instructed is correct under the law by specialists who are paid to understand it and provide the right information.
@Oliver: Naturally, I agree with you about getting proper legal advice, etc.
It just seems to me that the new GST law doesn't address the question of foreigners purchasing digital products/services originating in Australia.
If your understanding of "place of consumption" is the right one, then foreigners should already have been paying GST on digital products/services originating in Australia. If your understanding of "place of consumption" is not the right one, then foreigners should not have been paying GST on digital products/services originating in Australia. But this question, as far as I can tell, is simply not addressed by the new GST law.
Throw who out? The US company is already "out" and the DE company is fully compliant.