New Zealand to Overhaul GST Rules
April 24, 2012 Taxation in New Zealand
New Zealand will soon establish a GST registration system for non-resident businesses, allowing them to claim GST refunds.
On April 23rd the Minister of Revenue of New Zealand Peter Dunne released a statement outlining the government’s intention to overhaul the national Goods and Service Tax (GST) system, allowing foreign businesses to claim GST refunds.
According to the Minister, the GST system should be neutral for both non-residents and New Zealand companies doing business in New Zealand. However, under current regulations, non-resident businesses are not able to make claims for and receive a refund for GST. He suggested that the disparity “can mean that our GST system is a hurdle for non-resident companies looking to do business with New Zealand businesses.”
Peter Dunne indicated that, as a practical step, the government would introduce new zero rating rules and implement a new GST registration system for overseas businesses.
The overhaul was first proposed in a discussion paper released by the government in August 2011, and the idea was met with support from businesses and tax professionals.
The Minister said that the final details of the new measure still need to be finalized, but the changes should be implemented by April 1st 2014.
Commenting on the importance of the GST amendments, the Peter Dunne said: “…Kiwi businesses are generally are astute and innovative, providing high quality goods and services. By removing GST as an impediment, this will help level the playing field and allow our businesses to compete for contracts internationally.”
Photo by Abaconda