AUSTRALIA is looking to amend the Taxation Act, 2019, to allow it to tax its citizens on “income generated from the sale of services or other goods”.

The move, expected to be introduced next month, follows a ruling by the Tax Court which said the Australian Government did not have to pay taxes on the income of people who earn the majority of their income from a website called “TaxJar”.

The court found the Government was liable for the tax on the $3 million it had earned from the website since 2007, but did not find the Government owed the tax.

“In view of the Government’s compliance with the Court’s ruling, it is the Government and its business partners who will now be subject to the tax,” the court said.

“This is the first time that Australia has made an application to amend its tax legislation to address the problem of offshore taxation,” said the Prime Minister’s spokeswoman on Wednesday.

The decision to introduce a tax on online sales has been condemned by the Australian Taxation Office, which said it was “absolutely right” the Government had made its tax payments to the Australian public and had paid its fair share of taxes.

“The Tax Act does not apply to overseas tax havens, and it would be wrong to assume that tax will always be paid by the Government of Australia,” the ATO said in a statement.

“Online retailers must comply with Australian tax law, whether in Australia or overseas.”

The Tax Court said the Government should be required to make its payments in a timely manner.

The ruling by a lower court is expected to see the Tax Act amended to allow the Government to tax the income generated by websites that offer services and goods, such as “taxativo” and “taxation” websites, in the same way that the Australian Securities and Investments Commission (ASIC) and other financial institutions are taxed.

In February, a federal court in Sydney found the Tax Office did not owe taxes on $6.5 million of income it had received since 2008, after it received $1.7 million from a “taxinjo” website that offered advice about how to file a tax return.

The court said that money was “not taxable income” because the Government did “not take the profits of this website into account” and that it should not be subject “to taxation”.

“It is therefore a matter of serious concern that the Government has not been fully responsive to the Tax Commissioner’s advice in respect of its compliance with this Act,” the Court of Appeal said.

The tax watchdog has previously said that if the Government were to implement a tax scheme that required it to make a payment to the Treasury, the cost of compliance would be “unprecedented”.

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