Are there people in Australia buying your products on eBay?

You might want to promote a special sale exclusively for them because it looks like your future with them is indefinite.

eBay said it could resort to blocking Australians from buying from foreign sellers on its marketplace because of Australia’s new tax laws.

eBay refuses to comply with the 10% tax which the Australian government is imposing on imported goods sold online, calling it complex and unworkable.

Australia’s new tax law, which takes effect on July 1, requires online businesses that sell more than $75,000 worth of products in the country every year to charge GST.

eBay is a large marketplace which has over a million sellers selling a wide range of products and earning a revenue beyond the tax threshold which was set by the government of Australia.

Australian Treasurer Scott Morrison says this will ensure a level playing field for local businesses that aren’t exempted from GST unlike their competitors overseas; only foreign packages that have a value over $1,000 are currently charged GST.

However, eBay thinks of the proposed legislation as impractical since the current business models of online marketplaces do not support the collection of GST.

If they are to go with the GST changes, eBay says they will have to extensively reorganise their business models which could take a long time.

In a submission to the Senate Economics Legislation Committee, Jooman Park, vice president and managing editor for eBay Australia and New Zealand, wrote:

“No tax would be paid to Australia and none would be owed. It would raise no revenue, deny Australians access to choice and lessen price competition.”

He also stressed the point that the new GST does not even represent a win for bricks-and-mortar retailers because Australians would still find better options online.

Third-party marketplaces are not sellers

Besides the irrationality of the bill, eBay notes how it misconstrued the nature of its business.

eBay cleared up a misconception in the legislation which referred to it as a “seller” and an “electronic distribution platform”, for it is neither.

To clarify this, Park explained:

“eBay is not a seller. eBay does not own the goods, does not handle payments and it does not distribute anything. eBay is a third-party online marketplace that simply connects buyers and sellers.”

Though he acknowledges that there are some marketplace-style business models wherein the marketplace is also the seller, Park stressed that eBay does none of this.

He stressed that the Australian government purposely deemed eBay to be a seller in the new legislation so that they can give the impression of raising revenue.

When eBay polled 1,000 Australians, though, it found 59% of them did not support the bill.

If eBay decides to restrict Australian customers to buy only from sellers in their country, will this affect your business?