GST on Digital Products and Subscriptions in Australia: Netflix, Adobe, Spotify 2026
Since 2017, overseas companies selling digital products to Australians must charge 10% GST โ the same as Australian businesses. This guide explains why you're paying GST on Netflix, Adobe and Spotify, and what businesses need to know about claiming credits.
The 2017 Rule Change โ Why Overseas Digital Services Now Charge GST
Before 1 July 2017, overseas digital services sold to Australian consumers were largely GST-free โ creating an unfair advantage over Australian businesses who had to charge GST. The ATO changed this with the "Netflix Tax," requiring overseas digital businesses to register for and charge Australian GST if their Australian sales exceed $75,000 per year.
What Digital Services Attract GST in Australia?
GST applies to digital products and services when:
- The content is delivered electronically (streaming, download, software as a service)
- The consumer is in Australia at the time of purchase
- The transaction is not GST-free for another reason
Covered services include:
- Video streaming (Netflix, Disney+, Stan, Apple TV+)
- Music streaming (Spotify, Apple Music, YouTube Premium)
- Software subscriptions (Adobe Creative Cloud, Microsoft 365, Canva Pro)
- Cloud storage (Google Drive, Dropbox, iCloud)
- Online games and in-app purchases
- eBooks, digital magazines and online newspapers
- Online learning platforms (Udemy, Coursera, LinkedIn Learning)
GST from Major Platforms
| Service | Charges GST? | Monthly Plan (approx) | GST Component (รท11) |
|---|---|---|---|
| Netflix Standard | Yes | $18.99/month | ~$1.73 |
| Spotify Premium | Yes | $12.99/month | ~$1.18 |
| Adobe Creative Cloud | Yes | $87.99/month | ~$8.00 |
| Microsoft 365 Business | Yes | $22.00/month | ~$2.00 |
| Google Workspace | Yes | $17.00/month | ~$1.55 |
| Canva Pro | Yes | $24.99/month | ~$2.27 |
Businesses Claiming GST Credits on Digital Subscriptions
If you're a GST-registered business and you subscribe to these digital services for business purposes, you can claim the GST as an input tax credit on your BAS. To do this:
Download your invoice from each platform
Most platforms (Adobe, Google, Microsoft) provide tax invoices in your account billing section. These show the GST amount separately.
Verify the invoice is a valid tax invoice
It should show the supplier's ABN (if Australian) or equivalent identifier, the GST amount, and the words "Tax Invoice."
Calculate your total credits for the quarter
Add up all GST amounts from digital subscriptions and include them in Box 1B of your BAS.
Keep records for 5 years
Save PDF copies of all invoices. Cloud accounting software can automate this for you.
Overseas Sellers โ What Are Their Obligations?
Overseas businesses selling digital services to Australians must:
- Register for GST with the ATO if Australian sales exceed $75,000
- Charge 10% GST on sales to Australian consumers
- Lodge a simplified GST return with the ATO quarterly
- Remit collected GST to the ATO
They do NOT need to register for a full Australian business setup โ the ATO has a simplified GST registration system specifically for foreign digital service providers.
Practical Guide for Australian Businesses
- Ensure all your digital service accounts have your ABN entered in your billing profile โ this ensures you receive proper tax invoices and may affect the GST treatment
- Set up a dedicated folder in your email or accounting system for subscription invoices
- At the end of each quarter, review all digital subscriptions for GST credits before lodging your BAS
- Consider whether some personal subscriptions have a business component you can legitimately claim (e.g. Spotify for a retail store)
Overseas digital services (Netflix, Adobe, Spotify) charge Australian GST because they're required to by law since 2017. If you're a GST-registered business using these services for work, you can claim the GST back on your BAS โ just download your invoice and enter the GST in Box 1B. Use our reverse GST calculator to extract the GST from any subscription total.