The price of some sunscreen products could rise as the Australian Tax Office updates its GST guidelines.
Sunscreen products have always been exempt from including GST, but the ATO says items not used predominately as sunblock – like BB creams and moisturisers containing SPF – will now be hit with the tax.
Under the new changes, products must be promoted as predominately used for sun protection to be exempt from the tax.
Products must also be applied to the skin, included on the Australian Register of Therapeutic Goods and have an SPF of at least 15 to avoid the tax.
The changes mean there could be an immediate 10 per cent increase in price for foundations, BB creams, moisturisers and beauty products containing SPF.
The ATO says the GST status of most products should stay the same, however, 9News understands that retailers would have to adjust the cost of a product to account for GST if they aren’t meeting the updated guidelines.
The changes also apply to other items containing SPF including insect repellent, anti-aging creams/serums, complex correction creams, anything marked as full or medium coverage.
“The ATO is updating its guidance to clarify how we view the current law applying to sunscreen products,” a spokesperson for the ATO said in a statement.
“Increasingly, modern products are being developed and marketed as having other benefits or uses, such as moisturising and tint.
“However, to be GST-free, a sunscreen product must be ‘marketed principally for use as sunscreen’.
“If a product is not marketed principally for use as a sunscreen it is, and always has been, subject to GST.”
Which products will it affect?
Products marketed as “2-in-one”, “3-in-one” and “dual action” will also be hit with the tax.
Items marked as “sunscreen”, “sun protection”, ”broad-spectrum protection”, “UVA and UVB protection”, “water and sweat resistant” and “reef-friendly” will all be exempt from the tax.
Cancer Council says that cosmetic products containing SPF offer little to no protection from the sun.
“Unless cosmetics are labelled with an SPF50 or SPF50+ rating, you should wear additional sunscreen under your makeup if you’re going to be in the sun for an extended period,” it says.
“Best practice is to reapply your sunscreen every two hours – not just once in the morning underneath your makeup.
“Be mindful that most cosmetic products offer either no protection or protection that is much lower than the recommended SPF50 or higher.”
The ATO has urged beauty suppliers to re-assess the scope of their products to ensure they are classified correctly.