Netflix executives say the company is willing to pay the Goods and Services Tax (GST) if the government makes it legal. In a statement to the Australian Associated Press, the company said “Netflix has been and will be compliant with all applicable laws and regulations, and we pay taxes as required under local and national law.” Recent discussions by the government have hinted at making music and movie downloads subject to GST. This new requirement for the company has been labeled the “Netflix tax” and is widely considered to be bad for consumers because it will likely raise the price for the service. However, it would also likely create billions of dollars in tax revenue for the government.
Federal Treasurer Joe Hockey assured the public by saying the “Netflix tax” was not an additional tax. Rather, the government simply wants to tax the company for the services it already provides. The new provisions are meant to adjust Australia law to take into account new technologies and services. Companies providing “intangible services” into Australia, wherever they are located, will be subject to GST. "The states agreed in principle that we should move in that regard and we have offered to work as quickly as possible with them to introduce legislation to address that," Mr Hockey said. Treasury deputy secretary Rob Heferen said that compliance costs would be very low for international companies providing services in Australia. He also said there was no legal restraints to the change in tax law. "Australia wouldn't need the agreement of any country to do this. The federal government would need the agreement of the states and territories," Mr. Heferen said.