Office365 moves to Australian data centres, but has GST implications

Microsoft have announced that from the end of March 2015, new Office365 customers will automatically be tenanted in Microsoft’s new Australian data centres. This is great news for those who have avoided the Office 365 platform due to data sovereignty issues, will help to improve performance for Australian customers.

However, it does mean that since it’ll be serviced from within Australia, GST will be payable on the services.

Office 365 customers

• Existing customers are to be automatically moved to local datacentres from September 2015
• We will work closely with existing customers as we move their data and will contact them with additional information on processes and timings closer to the transfer
• From the date of GA, all new Office 365 customers will be automatically tenanted in Australian datacentres
• Customers can opt out of the move by contacting Office 365 support

Dynamics CRM customers

• Existing customers will need to proactively opt-in to be moved into the Australian datacentre. We strongly recommend you encourage customers to opt-in.
• From the date of GA, all new Dynamics CRM Online customers will be automatically tenanted in Australian datacentres

GST implications – Office 365 customers will now need to pay GST on their subscriptions

Straight from Microsoft: you’ll need to part with more of your cash to the Office 365 service soon!

Microsoft is required to include GST in the price of taxable supplies of goods and services provided and offered in Australia. From the GA date, when Office 365 and Dynamics CRM Online services become available from Microsoft Australia datacentres, Partners and customers will pay an additional amount equal to the Australian GST in respect of such Office 365 and Dynamics CRM Online services to Microsoft, and tax invoices will be issued.