New Australian Tax Regime Will Affect E-Commerce Platforms around the World

21/01/2018

In 2017, the Australian government passed new legislation on goods and services tax (GST) in order to level the playing field between Australian goods and imported products. The legal reforms aim to ensure that both Australian goods and foreign low-value products are subject to the same tax regime.

There are two main kinds of taxes:

  1. GST on low-value imported goods: This applies to imported goods worth less than AUD 1,000, whether they are sold by Australian retailers or overseas retailers;
  2. GST on digital products and services: This applies to digital goods and services (e.g. music bought online or digital streaming services).

GST on low-value imported goods

What has changed?

As of 1 July 2017, GST on low-value goods applies to products sold by Australian retailers.  

At present, goods imported from abroad that are priced below AUD 1,000 are exempt from GST. However, from 1 July 2018 onwards, Australian residents will have to pay an extra 10% on most types of products, regardless of their value.

The Treasury Laws Amendment (GST Low Value Goods) Act 2017 makes the following reforms:

  • make supply of goods valued at AUD 1,000 or less at the time of supply connected with Australia if the goods are purchased by consumers and are brought into Australia with the assistance of the supplier;
  • treat the operator of an electronic distribution platform (EDP) as the supplier of low-value goods if the goods are purchased through the platform by consumers and brought into Australia with the assistance of either the supplier or the operator;
  • treat re-deliverers as the suppliers of low-value goods if the goods are delivered outside of Australia as part of the supply, and the re-deliverer assists with their delivery into Australia as part of a shopping or mailbox service that it provides under an arrangement with the consumer;
  • allow non-resident suppliers of low-value goods that are connected with Australia to elect to access the simplified registration and reporting system; and
  • prevent double taxation.

Learn more about the GST on low-value imported goods.

Who is affected?

Under the new law, you may need to register for and charge GST if you are:

  • a merchant who sells goods;
  • an operator of an electronic distribution platform (EDP), such as an online marketplace through which merchants sell goods; or
  • a re-deliverer that helps to bring goods to Australia.

This will affect e-commerce platforms that are not Australian. For instance, China-based companies that sell goods worldwide through global e-commerce platforms such as Amazon or eBay may have to adjust prices for consumers in order to take into account this new tax.

Businesses that meet the AUD 75,000 registration threshold will need to take action to review their business systems to determine how the tax will be collected and ensure that they are able to comply.

Related reading: Essential Legal Considerations for Online Marketplaces

What do you need to do?

If your business meets the AUD 75,000 registration threshold, you will need to:

  • register for GST;
  • charge GST on sales of low-value imported goods (unless they are GST free); and
  • lodge returns with the Australian Tax Office.

GST on imported services and digital products

What has changed?

As of 1 July 2017, GST applies to sales of services and digital products imported to Australian consumers.

Learn more about GST on imported services and digital products.

Who is affected?

Overseas businesses that meet the AUD 75,000 registration threshold should consider whether they need to register for GST. This includes:

  • merchants who sells imported services or digital products to Australian consumers; and
  • operators of an electronic distribution platform (EDP) or online marketplace, such as an app store that supplies imported services or digital products to Australian consumers.

What do you need to do?

If you are an overseas business that meets the AUD 75,000 registration threshold, you will need to:

  • register for GST;
  • charge GST on sales of low value imported goods (unless they are GST-free); and
  • lodge returns with the Australian Tax Office.

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What is a company secretary?

15/01/2018

No, it’s not the kind of secretary you’re thinking of – someone who is responsible for managing administrative work in a company and looks after visitors. The type of company secretary that we are referring to is responsible for something else entirely.

Company secretaries are, simply put, individuals in senior positions in a private company, usually in a senior managerial position or above. They are responsible for ensuring that an organization complies with standard financial and legal regulations around running a company, and on the whole responsible for maintaining high standards of corporate governance within a company.

If you’re thinking about expanding your business, it is important for you to think about how you can best help your company function as an organization. This is where the role of the company secretary comes in, as an individual who will help ensure that your organization remains functional, and that the various stakeholders in your company are able to get the most out of their investment in your company.

Broadly speaking, in most jurisdictions, the company secretary owes duties to three groups of stakeholders – the company, the company directors, and the company shareholders.

These are, in brief:

Duties to the company

The company secretary ensures that the organization complies with the regulations set out in the respective pieces of legislation governing companies, in the respective jurisdiction in which the company is founded. In general, he is tasked with maintaining the high standards of corporate governance in a company, that is ideal for its functioning.

Duties to the shareholders

The company secretary is also responsible for communicating with shareholders and ensuring their interests are protected. He also is responsible for ensuring that shareholders are able to take part in the decision making process at a company’s Annual General Meeting, and does so by disseminating financial statements and any other relevant information needed for shareholders to come to an informed decision.

Duties to company directors

It is also their responsibility to register and communicate with shareholders, to ensure that dividends are paid. They also assist in the managing of company records, which include information like a list of directors and shareholders, and the annual accounts of a company. A company secretary often takes minutes at directors’ meeting as well.

Do note that these are the general requirements and expectations for such individuals. There may be additional specific scopes of duties depending on which jurisdiction you are in.

Relevant Legislation in the Asia Pacific

Singapore: Companies Act (Chapter 50)

Hong Kong: Companies Ordinance (Cap 622)

Australia: Corporations Act 2001

New Zealand: Companies Act 1993

United Kingdom: Companies Act 2006

These acts will generally set out issues such as who may be qualified to serve as a company secretary, whether a company must have a company secretary, the specific duties owed by the company secretary, and the potential penalties for contravening any of the regulations related to serving in this capacity.

The importance of this role in a company should not be overlooked. While the internal governance of a company may sound like one of the least exciting aspects of your business that you have to keep an eye on, it is undeniable that your company will not be able to function without it.

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The Strength in Strategy: How Important is the Need to Strategise?

10/01/2018

By Evelyn Chow, Managing Director, DecodeHR Pte Ltd

In the course of our strategic HR consulting work with our clients, the inadvertent question of ‘What is the vision of your company and what is your strategic plan?” will emerge as we begin to think deeper about the client’s needs. Far too often, the overarching HR strategy is not developed to drive the overall organisational strategy. Consequently, this creates inherent challenges in the HR programs, policies and underlying infrastructure of the organisation. It’s almost akin to buying and preparing all the ingredients before deciding what dish or even type of cuisine to cook.

Sometimes, we are told there is a vision statement, but the client is not very sure what it is, and sometimes there isn’t a vision statement at all. And on a few occasions, the honest CEO will admit that they need one, but just haven’t gotten round to putting it together. Far from being disdainful, we know too well how easily one gets caught up with the daily challenges of selling and delivering, to pause and take time out for some strategic planning. Developing a strong strategy and keeping an eye on it to make mid-course corrections requires both discipline and keen insights on the developments within one’s immediate sector and the broader landscape.

I am heartened to see that the bent of strategy has moved away from the ‘classic strategy’ to ‘adaptive strategic’, as the Monitor Institute’s framework describes this very well. In the given conditions that we operate with, one has to be bold enough to experiment and roll out minimum viable products to test the market. It is also critical to be far-sighted enough to recognise trends and patterns of the market and not rely entirely on data to make decisions. I must admit that in a corporate and for-profit environment (Monitor Institute’s work is philanthropic in nature), I am not entirely convinced that it is possible to have the entire organisation experiment with new ideas. But certainly, it would be viable to have a select few people (read: passionate and energised) put up their hands to be responsible for generating and testing new ideas. In smaller set-ups, it is a luxury to be able to have a dedicated team focusing only on ‘lab work’ as it is popularly called these days.

If you would like to read more on the concept of adaptive strategy, this article in the Stanford Social Innovation Review outlines it very well, and you may want to look it up.

The ‘Cascade of Strategic Choices’ provides a really useful framework to guide our thinking. If your business is a for-profit organisation, think about what problems your company can solve today and how your products/services can make a difference. The rest really wholly applies.

Amidst the myriad of choices that we face in determining the direction of our business, clarity of thought is something we must pursue.

Time for that strategic planning retreat!

This article is a guest contribution by Evelyn Chow, Managing Director of DecodeHR. The views expressed here are of the author’s, and Zegal may not necessarily subscribe to them. You, too, are invited to share your point of view. Learn more about guest blogging for Zegal here.

About DecodeHR

DecodeHR provides strategic advice and high-impact solutions to clients primarily in Asia, specializing in the areas of Strategic HR Reviews, Competency Frameworks Development, Strategic Workforce Planning, Pre and Post Merger & Acquisition integration and Transformation projects.

Our strength is our deep knowledge of Singapore and Asia, and this is coupled with experience in the international arena. We distill the best global practices to bring to you practical solutions for maximum impact.

Have A Small Business? Don’t Fear The Internet – Let A WordPress CMS Help You!

Let’s start with the basics. Do you need a website? If you’re any business that is seeking more visibility and expanding their customer base, the answer will be a resounding, yes. Launching a website has become almost as important as starting any business these days. You’ll find entrepreneurs are building their website first and marketing their business before launching their business in the real world. Research has shown that as much as 90% of consumers search online before making any actual purchase. It’s never been more important for any businesses, especially small businesses to build a website and let everyone know about your mission and services.

Setting up and running a decent website was a massive undertaking only a few years ago. Skip to present day and the internet is flooded with low-cost hosting solutions (which store your website online) and easy-to-manage platforms like WordPress (which help build it). Together, cheap web hosting and the WordPress CMS has opened up the internet to make it more accessible to anyone, no matter the size of the business, internet know-how or budget.

Still not convinced? Setting up a WordPress powered website is becoming more like opening a Facebook account these days, with one click logins and install, app-style add ons the process will be more familiar than you think. Still, people fear this process, and find it more difficult than it actually is. You don’t need to see a line of code or know any special technical jargon to get yourself a pretty decent setup using hosted WordPress.

Why is WordPress the Best CMS for Small Businesses?

WordPress is the most popular content management system, and there’s no doubt about that. More than 60% of websites today are hosted on WordPress. WordPress offers perfect solutions for all business types and sizes. Given these statistics, you can consider yourself in good hands. Some huge and well-respected websites are using this platform. It’s flexible enough to create simple or seriously complex sites. What is even more surprising is that setting up a WordPress website doesn’t have to be expensive.

Grow Your Small Business with WordPress

WordPress comes in two flavors: hosted and self-hosted. Both versions have their advantages and disadvantages. Together they offer small businesses a powerful and user-friendly platform that can grow along with their needs and experience.

Let’s take a look at how this works:

  • Hosted Version: Selection of plugins, themes and templates to design a fully functioning website (for a price).
  • Self-Hosted WordPress: Complete freedom with access to unlimited free and premium themes and plugins (add-ons) with a slight learning curve (free to use).

Unless your business depends on on-site sales for its income (in which case, self-hosted is the one for you), your website will likely serve as a marketing tool and not require much beyond the out-of-the-box hosted WordPress functionality. Many small businesses keep their website on the hosted version of WordPress forever. This can be perfectly adequate to meet most needs.

Related reading: 7 Online Marketing Tips For Your Small Business

For a small business looking for a no-nonsense way to launch a website, the hosted version of WordPress is an excellent choice. You have the peace-of-mind that a trusted partner (the WordPress team) is managing the technical end of their website (security, updates, maintenance). It’s handy to have the technical end of your website managed by someone else – all the headaches of maintaining your own website are taken care and you can concentrate on the creative/ business side of things.

If hosted WordPress becomes too restrictive, then you can switch over to the self-hosted version. It’s available for free, but you need to arrange a host and install the software yourself. To make installation as easy as possible, most web hosting companies offer 1-click installation tools that make installing a self-hosted version of WordPress just as easy as it is over at wordpress.com.

Yes, WordPress is the bee’s knees, and we haven’t gotten down to why it is the best site builder for small business.

What Can WordPress do For Me?

WordPress’ interface is the height of user-friendly. There is no need to be a professional Web designer to make simple updates on a WordPress website. Adding new pages, posts, and images are easy and take only a few seconds. WordPress’ user interface is highly intuitive. Ease of use means less time spent learning to use the software, saving you valuable time you could be using to run your business.

In addition to being free, user-friendly and providing with user support, WordPress websites come with the following benefits:

  • Choice of Themes and Add-Ons to give your site a professional look which is user-friendly and fitting tothe style of business.
  • The platform was design with SEO so your website should have no issues appearing in search engines (so people can find you)
  • Responsive – Most themes will work well on all mobile devices (this is essential since more web browsers than ever are using mobile phones and tablets to access web pages).

Closing Remarks

For the majority of small business owners, it is quite daunting to take care of a business website on top of their regular duties. The thought of getting a website set up might seem like a pipe dream. It can look like a distant dream/ nightmare as having an online presence can come with costs, time and effort which some small businesses just can’t afford. The obvious solution to all these concerns is WordPress.You will be not only able to manage business your website but also have complete freedom to enhance the look & feel of the interface without the need to hire a separate developer.

Hopefully this blog post has taken away some of your fears and inspired you to consider WordPress for your business website. Being successful in business means taking bold steps, and making decisions to drive your success. I’d encourage you not to overthink the ‘trappings’ of creating a website. Just install WordPress and see how easy it can be to set up your site using WordPress’ impressive features. 15 minutes from now, you could have your own website!

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This a guest post by Bobby Pham of Namecheap. The views expressed here are of the author’s, and Zegal may not necessarily subscribe to them. You, too, are invited to share your point of view. Learn more about guest blogging for Zegal here.

Author Bio

Bobby Pham is part of the Content Management Team at Namecheap. He specializes in promoting WordPress as well as general tips on getting online. The tips, explanations, tutorials, and articles he provides will help individuals build the online presence they want.

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