Robert Goodman Accountants Blog

Australian consumer law protects people who purchase goods from Australian companies, but what recourse do you have for a refund when you've bought something from a foreign business that has little or no physical presence in Australia? A recent Full Federal Court case has set a precedent for foreign-based businesses to abide by the Australia consumer law in most circumstances.

What are your consumer rights when you purchase something from an overseas business? According to the Full Federal Court case between the Australian Competition and Consumer Commission (ACCC) and Valve Corporation, Australian consumer law applies if a business is carried on in Australia or if the conduct was in Australia. This may be the case even if it is a foreign corporation with little or no physical presence in Australia.

Valve is a US-based company and one of the world's largest online video game retailers through the "Steam" platform. Its business premises and staff are all located outside of Australia and it holds no real estate in Australia. The only asset it holds in Australia are computer servers. Payments for subscriptions to the "Steam" platform were made in US dollars and processed in the US.

To use the platform to download games, users had to acknowledge subscriber agreements, which contained various representations including no entitlement to refunds, and contractual exclusion of statutory guarantee. Valve sold a catalogue of games to users from various game developers. Some of those games did not appear to be finished or had game-breaking bugs, which caused the games to be either unplayable or not of acceptable quality. When several users attempted to obtain refunds for those games, Valve asserted that as per their subscriber agreement, they do not offer refunds or exchanges on their software products.

The original case was kick-started by ACCC after complaints from some gamers who used the "Steam" platform to buy games that were not of acceptable quality and were subsequently refused a refund. In the original case, which was heard before the Federal Court, Valve lost when the Court found that they had engaged in misleading or deceptive conduct and made false or misleading representations. The Court had further imposed a penalty totalling $3 million.

Valve appealed the judgment and lost again in the Full Federal Court, which upheld the Federal Court's initial findings and the penalty imposed. Whilst the arguments and judgments involved in this case are technical and complex, the outcome is clear. If you purchase goods (it does not matter whether they are physical goods or digital goods) from a company that carries on business in Australia, the seller is bound by the Australian consumer law in its dealings with you.

ACCC chairman Rod Sims said:

"[t]his case sets an important precedent that overseas-based companies that sell to Australians must abide by our law. All goods come with automatic consumer guarantees that they are of acceptable quality and fit for the purpose for which they were sold, even if the business is based overseas".

Whilst Valve has more than two million Australian subscriber accounts, this ruling applies equally to any online goods seller that isn't based in Australia, regardless of their size. So, if you or someone you know has in the past been refused a refund for a purchase made online that was not of acceptable quality, you now have the full weight of the law behind your claim.

Call us at Robert Goodman Accountants on 07 3289 1700 or email us at reception@rgoodman.com.au . © Copyright 2018. All rights reserved. Source: Thomson Reuters.   Brought to you by Robert Goodman Accountants. 

The ATO has launched the latest round of their data-matching program to include all visa holders, visa sponsors and migration agents. It will request the records of approximately 20 million individuals for compliance purposes. Find out now if you're affected and what you can do to avoid a visit from the tax man.

Visa holders, sponsors and migration agents beware: the ATO has recently gazetted a notice indicating their intention to conduct a data-matching program. The ATO will request records of approximately 20 million individuals from the Department of Immigration and Border Protection for the years 2017 to 2020. Some of the information that will be handed over to the ATO includes:

  • address history for visa applicants and sponsors;
  • contact history for visa applicants and sponsors;
  • all visa grants;
  • visa grant status by point in time;
  • migration agents (visa application preparer who assisted or facilitated the processing of the visa);
  • address history for migration agents;
  • contact history for migration agents;
  • all international travel movements undertaken by visa holders (arrivals and departures);
  • sponsor details;
  • education providers (educational institution where a student visa holder intends to undertake their study); and
  • visa subclass name.

This rolling program has been continued year-on-year since data analysis in 2011 found support for the view that there was an elevated risk relating to non-compliance and fraud associated with the visa holding population. Previously, the data obtained was used in ATO risk detection models to select populations for investigation relating to tax return integrity, income tax and GST non-compliance and/or fraud. The program also aimed to improve knowledge of the overall level of compliance with taxation obligations by the relevant parties.

Specifically, the program in previous years was to ensure that visa holders, visa sponsors, and migration agents were:

  • completing correct tax returns and business activity statements;
  • meeting their registration, lodgement, reporting and payment obligations for PAYG withholding, fringe benefits tax (FBT) and superannuation guarantee; and
  • managing their tax obligations correctly.

The data-matching undertaken by the ATO is not perfect and is not sophisticated enough to be completely error free. According to the ATO, there may be times where discrepancy matching identifies a taxpayer as not reporting all of their income, but in fact they are reporting the income under another entity.

Before any administrative action is taken, relevant parties will have the opportunity to verify the accuracy of the information obtained by the ATO and will generally be given at least 28 days to respond.

The data obtained from the program may also be used to ensure compliance with other taxation and superannuation obligations, including registration requirements, lodgment obligations and payment responsibilities. The ATO will escalate cases for prosecution where taxpayers fail to comply with obligations after being reminded of them.

Are you affected?

How does this all affect you? If you're a visa holder, visa sponsor or a migration agent, you should ensure that all your tax and payment obligations are up-to-date. The ATO notes that where a taxpayer has met their tax obligations correctly, the use of this data will reduce the likelihood of any ATO contact. So if you want to avoid getting caught in the net, contact us today.

Call us at Robert Goodman Accountants on 07 3289 1700 or email us at reception@rgoodman.com.au . © Copyright 2018. All rights reserved. Source: Thomson Reuters.   Brought to you by Robert Goodman Accountants.