Aussies who subscribe to Netflix will soon pay up to 10 per cent more for the video streaming service, thanks to the so-called ‘Netflix Tax’, which will come into effect on Saturday, 1st July.
Once the new legislation is in place, the 10 per cent Good And Services Tax (GST) will be applied for the very first time to digital products and services purchased in Australia from overseas companies.
Netflix has confirmed to The New Daily that it will be adding the charge to its fees, but hasn’t confirmed if it will increase prices by the entire 10 per cent. Meanwhile, Netflix has already been testing price hikes to see if people will cough up more for the service.
Netflix is believed to have almost 3 million subscribers in Australia, and the ‘Netflix Tax’ is expected to help Aussie companies like Stan compete with services from overseas.
The ‘Netflix Tax’ will also affect other digital products like smartphone apps, music, e-books and games purchased by Aussies from overseas companies. Similar laws have recently been brought in by New Zealand, the European Union and South Africa.
Australia’s ‘Netflix Tax’ was first outlined by former Treasurer Joe Hockey in 2015, and is expected to raise $350 million over its first four years.