eBay Cooperates with ATO Audits

The Australian Tax Office (ATO) has asked for the personal and financial details of Australian eBay sellers who have annual sales of more than $50,000.00 (AUS) in an effort to determine whether such sellers are avoiding Australia’s goods and services tax (GST). In compliance with its privacy policy, eBay, a global auction and shopping website, provided the ATO with members’ contact names, user names, phone numbers, duration of membership, and monthly sales turnover for the period of July 1, 2003 to June 30, 2006. The ATO audit could potentially affect up to 1,000 Australian eBay sellers who may not be claiming GST on their sales in order to undercut competitors. At least one seller has gone into liquidation as a result of the audits.

eBay Australia is operated by eBay International, based in Bern, Switzerland, and is therefore not required to register for GST. Consequently, there is no GST on invoices sent by eBay Australia to its sellers for using related services. Some eBay sellers, however, may have falsely assumed that such invoices included GST, and may have made claims to the ATO to recoup such amounts. While representatives at eBay maintain that sellers are responsible for their own accounting practices, representatives at the Professional eBay Sellers Association have suggested that eBay register its local operation in Australia and obtain an Australian business number for GST purposes.

This entry first appeared in the March 22, 2007 edition of lawsof.com. For additional information, click here.