The Australian Taxation Office (ATO) has clarified that sunscreen products are only GST-free if marketed primarily for sun protection. This decision has sparked debate among skincare companies and health organizations regarding the cost and accessibility of sunscreen. The ATO's new guidance aims to ensure that products primarily functioning as sunscreen retain their GST exemption, while those marketed for additional benefits like moisturizing or foundation are subject to GST.
The Australian Taxation Office (ATO) has clarified the GST status of sunscreen products, stating that they are only exempt from Goods and Services Tax if they are primarily marketed for sun protection. This new guidance has been prompted by a surge in products combining SPF with moisturizer and tint, leading to confusion about GST applicability.
The ATO emphasized that sunscreen products must be marketed primarily for sun protection, applied to the skin, be registered on the Australian Register of Therapeutic Goods, and have a sun protection factor of at least 15 to remain GST-free. Products promoting additional benefits like moisturizing or foundation, even with SPF, are likely to be subject to GST. Skincare companies expressed concerns that this crackdown would increase product costs and potentially discourage sun protection usage. However, the Cancer Council emphasized that cosmetic products with SPF, including makeup and skincare, generally offer minimal to no sun protection and recommended using an SPF 50 or SPF 50+ sunscreen under makeup. The ATO encourages skincare suppliers to review the updated guidance and ensure accurate pricing for their products. Alex Roslaniec, co-founder of Australian hemp skincare business Hey Bud, argued that quality sunscreen products should be GST-free regardless of marketing, while Professor Anne Cust, chair of the Cancer Council's national skin cancer committee, stressed the importance of broad-spectrum, water-resistant SPF 50 or SPF 50+ sunscreen applied daily for optimal protection. Claire Hamilton, a melanoma survivor, shared her experience of prioritizing sun safety since her diagnosis, emphasizing the crucial role of regular sunscreen usage and skin checks
SUNSCREEN GST TAXATION OFFICE SKINCARE CANCER COUNCIL MELANOMA SKIN SAFETY
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