20 July 2018

Exposure draft legislation: GST on offshore hotel bookings


The Turnbull Government is ensuring offshore companies that sell hotel bookings in Australia have the same GST obligations as Australian companies.

Draft legislation released today for public consultation removes an exemption that allows offshore sellers not to count sales of hotel bookings in Australia towards their $75,000 GST turnover threshold. The measure will apply to sales made on or after 1 July 2019 and is estimated to increase GST payments to the States and Territories by $15 million over the forward estimates.

Removing this carve-out levels the playing field for local businesses, and delivers on a commitment made in the 2018-19 Budget

This measure follows the Government's decision to extend the GST to digital products and other services from 1 July 2017 and to low value imported goods from 1 July 2018.

The size of the GST pool has grown substantially from $24.4 billion when the GST was introduced two decades ago, to $67.3 billion this year; accounting for around 25 per cent of state and territory revenue.

Our measures to grow the GST base, including enforcing the payment of GST on property transactions and applying the GST to digital products and services, and low-value goods imported to Australia, are forecast to increase GST receipts by more than $2 billion in 2018-19, and more than $6.5 billion over the four years to 2021-22. As per the Intergovernmental Agreement on Federal Financial Relations, we will seek the unanimous agreement of the states and territories prior to the enactment of legislation.

The exposure draft legislation and explanatory materials are available on the Treasury website.

Submissions close on 9 August 2018.