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.
“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
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
The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.