Starting in July, Australians will be blocked from ordering items on Amazon’s United States site. The company said today that shoppers in Australia will be redirected to its local site, Amazon.com.au, and that its international sites, including Amazon.com, will no longer ship to Australian addresses. The change is in response to a new tax regulation that goes into effect on July 1 and requires businesses earning more than $75,000 AUD a year to charge Australia’s 10% Goods and Services Tax (GST) on low value items imported by consumers.
Called the “Amazon tax,” the new policy was introduced following concerns about the impact of Amazon and other large overseas e-commerce businesses on Australian retailers, who have to apply GST to all products they sell. A loophole in tax regulations, however, means that the GST is currently applied only to items purchased from overseas retailers if they are worth $1,000 AUD or more, which many local companies argued gave Amazon, eBay and other overseas competitors an unfair advantage.
Amazon launched its Australian site last December and says it currently has 60 million products, a fraction of the estimated 500 million products that are listed on Amazon’s U.S. site. As a placation, Australian customers will also have access to 4 million products that were previously available only on Amazon.com through its new Global Store.
In a statement emailed to TechCrunch, an Amazon spokesperson said:
“As a result of changes to Australian GST law on 1 July, international shopping options for Australian customers will change.
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. Based on our assessment, we will redirect Australian customers from our international sites to amazon.com.au where they can shop for products sold by Amazon US on the new Global Store, available today. This will allow us to provide our customers with continued access to international selection and remain compliant with the law which requires us to collect and remit GST on products sold on Amazon sites that are shipped from overseas.”