SYDNEY: US Internet giant Amazon will block Australian shoppers from its international websites to counter new tax laws on online purchases, it announced Thursday.
New rules require Internet retailers like the American behemoth to collect a 10 percent goods and services tax on everything bought from overseas sites from July 1, including under the current tax-free threshold of Aus$1,000 ($760).
As a result, Amazon said Australian shoppers wanting to use its global platforms will instead be directed to its smaller Australian site, which offers much less for sale.
Amazon reportedly baulked at the massive administrative burden of tracking GST from all overseas transactions.
“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,” it said in a statement.
The retailer said it would compensate by opening a “global store” for Australians, adding an extra four million items previously available only on its American website.
“This will allow us to provide our customers with continued access to (our) international selection and remain compliant with the law,” it said.
But even with the changes, the number of products available will be a fraction of what’s on sale globally.
The new tax rules were brought in after years of lobbying by struggling local retailers, which have to apply GST to all online and store sales,
Low consumer confidence and tepid wage growth have also hit traditional brick and mortar retail operations.
Amazon only launched a local Australian site last December, shipping from a warehouse in Melbourne with another planned in Sydney.
It had around Aus$1 billion in sales from Australia annually through shipping from overseas ahead of the launch, according to Morgan Stanley analysts.
Treasurer Scott Morrison said the new laws “level the playing field for Australian businesses.”
“The government doesn’t apologize for ensuring multinationals pay a fair amount of tax here in Australia,” he said.
Amazon blocks Australia from global sites over tax
Amazon blocks Australia from global sites over tax
- New rules require Internet retailers like the American behemoth to collect a 10 percent goods and services tax on everything bought from overseas sites from July 1
- The new tax rules were brought in after years of lobbying by struggling local retailers, which have to apply GST to all online and store sales
Closing Bell: Saudi main index closes in green at 11,134
RIYADH: Saudi Arabia’s Tadawul All Share Index rose on Thursday, gaining 185.3 points, or 1.69 percent, to close at 11,133.58.
The total trading turnover of the benchmark index was SR6.84 billion ($1.82 billion), as 205 of the listed stocks advanced, while 53 retreated.
The MSCI Tadawul Index increased, up 25.93 points, or 1.76 percent, to close at 1,496.09.
The Kingdom’s parallel market Nomu gained 145.25 points, or 0.62 percent, to close at 23,513.27. This comes as 35 of the listed stocks advanced, while 33 retreated.
The best-performing stock was Middle East Healthcare Co., with its share price surging 10 percent to SR36.30.
Other top performers included Bupa Arabia for Cooperative Insurance Co., which saw its share price rise by 7.89 percent to SR155.90, and Derayah Financial Co., which saw a 7.07 percent increase to SR26.66.
On the downside, Advanced Building Industries Co. recorded the biggest decline of the day, with its shares falling 4.45 percent to SR40.38.
Aldrees Petroleum and Transport Services Co. fell 4.4 percent to SR121.80, while CHUBB Arabia Cooperative Insurance Co. declined 3.77 percent to SR24.
On the announcement front, Saudi Arabian Mining Co. said it has commenced its offering of US dollar-denominated trust certificates, commonly known as sukuk.
The issuance, which runs from Jan. 22 to Jan. 29, is targeted at eligible investors in the Kingdom and internationally.
While the final size, pricing, maturity, and returns of the offering will be determined based on market conditions, the minimum subscription has been set at $200,000.
According to a Tadawul statement, Maaden has appointed a syndicate of 14 joint lead managers, including Albilad Investment, Citigroup, and Goldman Sachs, as well as HSBC, J.P. Morgan, and SNB Capital, to manage the issuance.
Maaden’s share price closed at SR72.45 on the main market, marking a 1.43 percent decrease.
