Tax for International Customers?
I just completed checkout for SBCG4AP Season 1, and after I completed payment i noticed that I was charged tax on the order.
Being in Australia, i thought overseas transactions were exempted from US tax being applied to purchases.
I've checked my invoices for Sam'n'Max Seasons 1 and 2, and I wasn't charged tax for them...
Is this a mistake in the checkout, or has something changed that i'm not aware of??
Being in Australia, i thought overseas transactions were exempted from US tax being applied to purchases.
I've checked my invoices for Sam'n'Max Seasons 1 and 2, and I wasn't charged tax for them...
Is this a mistake in the checkout, or has something changed that i'm not aware of??
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Comments
I do know that physical goods imported into Australia are charged a 10% tax on the goods and the shipping cost. The $3.50 you were charged for SBCG4AP comes out to 10%, so it's possible that this tax was supposed to be applied to downloadable goods and it was incorrectly not being charged before, or it's not supposed to be applied to downloadable goods and it's incorrectly being charged now. I don't know which of those things is true, but we are actively trying to get more information about this stuff. If it turns out we weren't supposed to charge the tax, we can credit it back to you once we figure out what's going on.
I've bought a fair bit of stuff online from around the world (both delivered physical items and non-physical stuff (e.g. downloadable software)), and have rarely been charged tax on any items, and definitely not on anything coming from the USA.
I pretty sure that 'importing' products to Australia aren't taxed with the GST (Australian Goods and Services Tax, which at the moment is 10%) as long as they are valued below a particular threshold (i'm pretty sure that threshold is AUD$1000) (see this page). Whether downloadable software counts as an 'import' i'm not too sure of...
Either way, the consumer law of Australia states that goods sold (if inclusive of GST) must be advertised as the total price including GST. If it is being imported and should have GST charged, the GST is paid by the importer to Australian Customs, and not to the foreign exporter.
Our goods aren't GST inclusive though. We show the tax separately at the end of the transaction, before you click the submit button.
When I inquired about the 10% tax on physical goods before, I was told that as long as the customer is the importer of record (which I think is true whenever they're buying from a company isn't based in Australia), then we need to charge tax. The 10% was charged on physical goods on our old system as well as on the new one, and it was set up for us by other people who specialize in this sort of thing, and we haven't had any complaints that I can recall from Australian customers running into issues at customs. I'm really not sure about the downloadable goods though, so we'll definitely look into that.
Tax on the web is a really tricky thing and I think there are a lot of sites out there who aren't doing it right. I'm not trying to say that we're completely foolproof, but we're trying to do the right thing! We're really not trying to cheat anyone.
I'm not sure if you understand me here, if you are charging GST for the goods (and if you are charging 10%, i'd bet it is the GST as there aren't really any other applicable Australian taxes in this situation), in Australian law it is not legal for you to advertise goods excluding GST (for example on the individual product page).
I know you guys are trying to do the right thing, but i think you are getting really bad tax advice.
I've bought many things (both for business and personally) from a lot bigger overseas companies than Telltale (e.g. Amazon, Microsoft, Valve, yesasia, etc.) and have never paid Australian tax to the company i've bought from.
In the cases where the goods bought were of substantial value (over $1000), Australian Customs collect the GST before releasing the goods.
I'm 99% sure that unless a retailer is located in Australia, they aren't allowed to charge Australian tax (GST) to a consumer from Australia buying goods; it is Australian Customs' job to collect GST and other applicable Australian taxes from the importer for goods being imported into the country: http://www.customs.gov.au/site/page.cfm?u=5549
I'd strongly recommend that you chase this up with your advisors and/or the Australian Tax Office.
I'm with him, really - I've ordered a lot of stuff from the US and UK (generally Amazon) and never get charged tax. They even remove the UK VAT for overseas orders at amazon UK.
If the tax being charged /is/ supposed to be there, I hope your payment processors are giving this money to the Australian government, because that's where it's supposed to go....
I've never before been charged Australian tax on an international order that was not from a Australian registered business.
The more I read up on it, the more I am sure: unless you are buying from an Australian registered business, international stores (online or not) have no business collecting Australian tax from customers based in Australia.
Yep, that's the one. When tax is payable, it is done by the importer (the customer) to Australian Customs.
An exporting overseas company should never have to pay Australian tax for purchases made by Australian consumers.
Sven, if you want to buy the season and then send an email to support@telltalegames.com explaining the situation, we can keep the ticket open until we have an answer and credit the tax back if it turns out it wasn't supposed to be charged.
Email sent to support@telltalegames.com
It might be legal for the USA, but if you are collecting Australian taxes then Australian consumer law is pretty clear in stating that GST must be included in advertised prices. Of course that issue is pretty redundant anyway considering the root issue is that GST shouldn't be charged in the first place
That's not a mistake. EU countries require VAT for downloadable software.
We are still working behind the scenes to get the tax questions answered, btw. Sorry it's taken a while.
I don't really understand how these things work, though.. but it seems weird to me as I pay taxes here when ordering but I still have to pay import taxes when the packages arrive. Maybe these are different taxes, I don't know.. don't know much about this.
You'd be surprised how tightly wrapped in red tape such a seemingly simple issue can be.
In any case, as of about three weeks ago we are no longer charging tax on merchandise for international orders, and we're currently figuring out the most painless way to credit people who were charged accidentally.
Is this just for Australia?
Note that this is only for physical merchandise. Digital products are still taxable.
Buh?! What's the justification behind that?! What's the difference between physical items shipped internationally and 1s & 0s shipped internationally??
It's still an export/import, therefore shouldn't be taxed by the exporter!
I get that you're frustrated about this, but I'm not sure what else I can say. If you don't want to buy our games because you don't want a percentage to go to the Australian government, that's your decision, but arguing about it on the forum isn't going to change the laws or our business decisions.
Most tax law is very public knowledge and published on the web by most governments, so surely you can provide some solid proof that states this.
I say that at least for the Australian government, all it's legislation is pretty well distributed and published, and all the stuff I have read through (a lot of which has been posted already on this thread) states that you are completely wrong.
It baffles me how Telltale can arrive at this conclusion when there is absolutely no precedent for it. Why is it that buying digital downloads from every other American-based company that i've shopped from I haven't been charged tax?
Why isn't Valve charging me tax for my Steam purchases? Why haven't I been charged tax at Direct2Drive?
Also I have an update - our controller has been speaking with someone at the Australian Tax Commission about the downloads, and after doing some research into it themselves they just came back today and said that we don't need to collect taxes on downloads after all. (Note that it wasn't a cut and dry answer for them either and that all of this has been going on behind the scenes while we've been talking about it here!
So it looks like we will be able to turn that off and add it to the refunds, for Australia. This doesn't change the fact that the EU and some other countries do require us to collect taxes on downloads.
I know this has been a pain for you, but I think we can all agree that customers giving their governments only what they are entitled for and nothing more is a good thing.
I hope you have fired/reprimanded that third-party company that was responsible for your totally incorrect tax calculations.
I know 10% tax of the game price isn't much (especially compared with some of the EU countries that require you to collect tax), but it is 10% of my after-tax income used for purchases that I don't want to give the Australian government.
I know this is probably a bit premature, but is there a planned timetable for the refunds?
Oh, understood, but I hope you can see our side of it, too. If there is any question about whether we should be collecting taxes, we have to err on the side of caution. The company is in a much better position legally if we collect taxes that we may not have needed to and pay them out anyway, than if we don't collect taxes we were supposed to and get in trouble with the government! Of course the goal is to only collect necessary taxes, but when the law is fuzzy (as it is in this case), it gets very complicated, very quickly...
We're trying to get started this week, but it's a little trickier for orders older than 60 days and we may need to do those by hand, which will obviously take a bit of time.
On the plus side, the Aussie dollar has tanked lately so your US dollars are worth more when they get refunded... granted it's not a major windfall (probably an extra $2 at the current exchange rate), but a nice surprise nonetheless.
I'd just like to add as well, Telltale are great when it comes to listening to their customers and just generally providing support for games. I've bought a fair few games from you guys and I'm always impressed by quick responses to any technical issues I encounter, as well as the general widespread participation of the Telltale team on the forums. It definitely helps to build community around a game when the developers are keen to be a part of that community as well.
So I'd like to extends a big THANK YOU for taking the effort to get to the bottom of things, and even retroactively compensating customers, instead of simply doing whats easiest for you, as many other companies would have done. So thanks again for being such a decent company!
(And I'm not just saying that because you're giving me 3 bucks back)