On 12 May 2015, the Australian Federal Government released its 2015 Budget. As part of the budget measures, the Government has announced that, from 1 July 2017, the 10% goods and services tax (GST) will be applied to digital services supplied to Australian consumers by companies located outside of Australia.
Under the current GST rules, a supply of digital services is connected with Australia and prima facie subject to GST if the services are "done" in Australia or supplied through an enterprise that the supplier carries on in Australia.
When a digital streaming service launched in Australia in March 2015, it was able to charge less for its services, as it had no local presence in Australia and its services were not performed in Australia. This made its offering cheaper than local providers, which were required to charge 10% GST.
This tax is seen by the Government as a tax integrity measure that will create a level playing field. The new tax will bring within the GST net the supply of movie downloads, games, and e-books from companies outside Australia.