New Zealand Looks to Expand GST to Overseas Retailers

August 18, 2015 Taxation in New Zealand

WELLINGTON – The government of New Zealand is looking to “level the playing field” between local suppliers and online retailers by levying a consumption tax on goods and services which were previously untaxed.

On August 18th the Minister of Revenue of New Zealand Todd McClay released a new discussion document regarding the proposal to implement a Goods and Service Tax on the purchase made from overseas online retailers.

Currently online purchases of goods from online retailers are not subject to GST at the time of purchase, although the tax may be applied by customs on products valued at over NZD 400 when arriving into the country.

Online service and digital purchases also do not face GST.

However, the government now estimates that as much as NZD 180 million in potential tax revenues is being lost each year due to these omissions.

In the discussion paper it is claimed that applying a GST to the sale of goods and service purchased overseas will “even the playing field” between local physical retailers and overseas suppliers.

It is estimated that implementing GST on the purchase of digital goods could result in the collection of tax revenues rising by NZD 40 million, with the remaining NZD 140 million to be made up by the dropping of the current NZD 400 threshold.

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