New Zealand: GST on remote services; residential land withholding tax

New Zealand: GST on remote services

A tax bill introduced 16 November 2015 would impose goods and services tax (GST) on “remote services” and would implement the government’s proposal for a residential land withholding tax. Both of these proposals were the subject of public consultation earlier this year, and the bill’s provisions generally do not vary dramatically from the proposals in the consultation.

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GST on remote services

“Remote services” is a term that covers digital services and content provided from offshore, as well as other services provided to New Zealand resident consumers. An offshore supplier would have to charge GST if sales to New Zealand consumers is greater than $60,000.* The new rule would apply from 1 October 2016. 

 

*$ = New Zealand dollar

Residential land withholding tax

The residential land withholding tax would apply to New Zealand residential land sold by an “offshore person” when the land is bought and sold within two years, and settlement occurs on or after 1 July 2016. The amount of the tax would be the lesser of: (1) 33% (or 28%) of any gain; or (2) 10% of the sale price. The tax would be primarily collected by the seller’s conveyancing agent. 

The residential land withholding tax is the final part of the government’s Budget 2015 land tax changes—the other measures are new tax information requirements and a bright-line test, and these have already been enacted.

 

Read a November 2015 report [PDF 491 KB] prepared by the KPMG member firm in New Zealand: GST on remote services / land withholding tax introduced

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