Digital products such as books, movies and games purchased by Australians from overseas could soon attract the GST.
Treasurer Scott Morrison introduced draft laws to parliament on Wednesday seeking to level the playing field between Australian and overseas business.
A software subscription service provided by an Australian company now attracts the GST, but one based overseas does not.
If the legislation clears parliament, overseas companies will have to collect and remit GST on products purchased by Australian consumers.
The so-called Netflix tax is expected to raise $350 million over four years from July 2017, with funds going to the states and territories.
"It ensures Australian businesses selling digital products and services are not disadvantaged relative to overseas businesses that sell equivalent products in Australia," Mr Morrison told parliament.
The legislation is in line with OECD guidelines, which recommend consumption be taxed in the destination country of imported digital goods and services. Mr Morrison noted the model has been implemented recently by the European Union and other countries, such as Japan and New Zealand, are developing similar rules.
WHAT THE NETFLIX TAX MEANS:
* Applies to digital products such as apps, movies, games and e-books bought from overseas.
* Expected to raise $350 million over four years.
* Due to start on July 1, 2017.
