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Microsoft Australia changes App Store T&Cs to pay GST

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Joshua Herbert
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Microsoft Australia's taken steps to ensure that Australia's goods and services tax (GST) is collected on apps sold at the Microsoft Store.

The company last week quietly updated its App Developer Agreement from version 8.1 to 8.2, with the changelog noting that the new version "Updated tax language to: (i) grant Microsoft Affiliates the right to remit taxes on behalf of New Zealand App Developers, (ii) clarify new GST registration requirements for New Zealand App Developers who make paid apps/in-app products available in the Store, and (iii) updated the Microsoft Subsidiary acting as agent in Australia and New Zealand."

The Register has since confirmed that the change was made to ensure compliance with updated legislation that recognises that digital goods may be sold with infrastructure hosted offshore, but that a company with a local presence effectively sells them in Australia and must therefore collect GST from buyers and pass it on to Australia's federal government.

Microsoft declined to comment about the change on the record, perhaps a reflection of the torrid times its experienced attempting to explain its tax practices to the Senate Economic References Committee (PDF)in 2017 and a a 2013 Parliamentary Inquiry into IT pricing.

Adobe complied with that new law in September 2016 for its cloud services.

It's not immediately apparent why Microsoft needed more time to make and/or formalise the change.

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Joshua Herbert
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