International
Electronic distribution platform
An electronic distribution platform is an online marketplace or app store that facilitates sales between sellers and buyers, and in some cases the platform operator is treated as the supplier for GST.
An electronic distribution platform, often shortened to EDP, is the technology that lets sellers and buyers transact online. Typical examples are online marketplaces, app stores, ride-sourcing booking platforms and accommodation booking sites. The law has special rules for these platforms because the real seller is often an overseas business or an individual, and it is much easier to collect GST from the platform operator than from thousands of small sellers.
Under the rules, where a supply is made through an EDP, the operator can be treated as the supplier for GST purposes instead of, or as well as, the underlying seller. This has applied to low value imported goods sold to Australian consumers since 1 July 2018, and to certain digital products and services. The operator charges GST on the sale, reports it, and the underlying seller generally does not charge GST on the same transaction.
For a seller using a platform, the practical question is whether the platform is treating itself as the supplier. If it is, the platform will normally show GST in the price and the seller's own sale to the platform may be GST-free or otherwise treated as a separate supply. If it is not, the seller keeps its own obligations, including registration if its turnover reaches the threshold. The platform's seller terms and tax documentation usually explain this.
For a buyer, an EDP rule means GST is more likely to be included in the price of items bought from overseas through a large platform. Registered businesses buying for business use should still check the invoice, since a platform-issued document may not satisfy tax invoice requirements in the same way as one issued by the actual seller.
A common mistake is assuming that using a platform means you do not need to think about GST. A seller who is registered still needs to report their sales correctly on the BAS, and a platform that handles GST on one type of sale may not do so for others. Another misunderstanding is that EDP rules apply to every online sale. They are targeted and depend on the type of supply and the circumstances.
If you operate on a platform or run one, document which transactions the platform reports as supplier, and reconcile payouts to your sales records. Platform statements are useful source documents but are not always a substitute for your own records. This is general information only, so confirm how the rules apply to your specific platform and sales with the ATO or a registered tax professional.
Worked example
An Australian consumer buys a $60 gadget from an overseas seller through an online marketplace that is treated as the supplier. The price includes GST of $60 / 11 = $5.45, which the marketplace operator reports to the ATO. The overseas seller does not separately charge GST on the same sale, and the consumer pays one price of $60.
Practical tips
- Read your platform's seller tax statements so you know whether it collects GST or leaves it to you. Do not charge GST twice on the same sale.
- Keep your own sales records and reconcile them to platform payouts, because fees and refunds can make the platform's summary differ from your actual takings.
- If you sell through several platforms, keep a simple table noting which ones collect GST and which leave it to you.