Govt plans to introduce new GST law

Govt plans to introduce new GST law

Offshore suppliers would have to register and return GST when their supplies of remote services to New Zealand residents exceeded $60,000 a year, Mr McClay said.

He said those big players don't want New Zealand to be an exception.

IT is proposing a law change which will require the overseas retailers to be GST-registered and for them to return the tax to the government - which says it is now missing out on around $NZ40 million ($A37 million) a year and growing.

"These measures are an important first step in the Government's efforts to deal with increasing volumes of onlnie services and other intangibles purchased from overseas suppliers that should, under New Zealand's tax rules, be subject to GST", he says.

"It makes no sense to make massive global firms like Amazon register and charge GST on an e-book at the point of sale, but not a physical book", said Harford.

"Minister McClay talks of fairness and creating a level playing field".

Officials are now trying to work out how to impose GST on physical purchases from overseas websites - like clothes or electronics.

Govt plans to introduce new GST law
Govt plans to introduce new GST law

"It demonstrates that our Government and policy makers have a desire to keep our GST model current for the digital economy and also in line with recent OECD guidelines and developments in Australia, Europe, Japan, South Korea and South Africa", Trombitas says.

"The fact that GST isn't charged on low-value imported goods that are below the Customs' de minimus threshold is also of concern to the government", McClay said.

But Mr Carter said he would be concerned if Internet Protocol (IP) addresses were used by retailers to determine whether consumers were from New Zealand because this was a highly inaccurate method.

In recent years the New Zealanders have turned to e-commerce and the main reason for the attraction is the lower prices of goods and services compared to bricks and mortar stores in the country.

The government says it is looking at the problem and Customs will release a discussion paper next year on the practicalities of taxing low-value items - estimated to be worth $140m in GST each year.

The proposed new rules would come into force on 1 October 2016, following enactment of the bill.

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