The Australian Tax Office (ATO) is revising its GST guidelines, which may lead to higher prices for some sunscreen products. Traditionally, sunscreen has been exempt from GST, but new rules will apply a 10 per cent tax to items not primarily marketed as sun protection, such as BB creams and moisturisers with SPF. To qualify for GST exemption, products must be specifically advertised for sun protection, included on the Australian Register of Therapeutic Goods, and have a minimum SPF of 15.
This change impacts various skincare items like anti-aging creams and insect repellents that include SPF. The ATO clarified that for a product to be deemed GST-free, it must be marketed principally as sunscreen rather than as a dual-purpose cosmetic.
The ATO advises beauty suppliers to review their products to ensure proper classification. Cosmetical products containing SPF often provide insufficient sun protection, so additional sunscreen application, particularly for extended sun exposure, is recommended unless they have an SPF50 or higher rating. The Cancer Council has cautioned consumers about relying solely on cosmetic products for adequate sun protection, stressing the importance of reapplying sunscreen regularly.