New Zealand: Proposed GST on imported services, digital content

New Zealand: Proposed GST on imported services

New Zealand’s government today released proposals for collecting goods and services tax (GST) on imported services and digital content. Collecting GST on low-value imported goods (i.e., having a value of NZ $400 or less) also is being considered by NZ Customs, and it will report to the government in October 2015 on potential options.

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The issue is how to collect GST—not whether GST applies.

An “easier issue” is GST on imported services. The proposal would require offshore suppliers to register for GST.

The issue, however, is more complicated with respect to low-value goods, in that a solution needs to be found to reduce the costs of collection so that it is lower than the GST. 

KPMG observation

The proposals are not viewed as a surprise, given the calls for GST neutrality between offshore and New Zealand businesses selling to local consumers. There is also the additional revenue forgone that, in an increasingly digitally connected world, is no small matter. The OECD’s proposals on taxing the digital economy and similar GST changes being proposed in Australia are also being viewed as triggers for action by New Zealand.

 

Read an August 2015 report [PDF 459 KB] prepared by the KPMG member firm in New Zealand: GST on imported services and low-value goods

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