Tag Archives: GST

New Zealand – Update on proposed new GST implications for foreign B2C e-service providers as of 1 October 2016

In accordance with our posts (here and here) on the new GST rules proposed to be effective form 1 October 2016 we would like to update you that PwC New Zealand has recently been advised by New Zealand Inland Revenue Policy that the standard legislative process will not be followed and the passage of the law will be accelerated.

As next step it is expected that the proposed draft legislation will be passed by the New Zealand Parliament under urgency in April 2016. We do not expect major changes to the draft law so businesses can already start / continue with their preparation for the new rules now. For convenience, please see below updated timeline until the go live date of 1 October 2016. Find out more

New Zealand – Tax Bill proposes GST registration for foreign B2C e-service providers as of 1 October 2016

Further to our previous post the New Zealand Government submitted its legislative proposal in relation to the GST law reform on offshore online purchases of services.

The Government has followed the modern VAT/GST practices and OECD recommendations and has decided to reform the GST system. The reforms focus on two main areas:

  1. Digital products and cross border services, in respect of which draft legislation proposes imposing GST on digital products and other services purchased by New Zealand private consumers from offshore sellers. The new rules will apply from 1 October 2016.
  2. Low value imported goods, where a consultation paper is being worked on regarding the options to impose of GST and duties on low value imported goods. PwC New Zealand expects the document to be released in April 2016.

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Australia – GST treatment of cross-border transactions – GST changes to B2C and B2B supplies – new exposure draft released

Treasury has released a second exposure draft (ED) legislation on the Government’s integrity measures to extend the GST to imported digital products and other services. The ED also seeks comments on provisions to give effect to the announced measure relating to GST cross-border business to business transactions and the ‘connected with Australia’ rules.

Treasury has noted that as a result of feedback from consultation (including feedback from a number of international suppliers that have had experience in dealing with similar provisions in other jurisdictions), changes have been made to the content of the earlier exposure draft. This is especially in relation to the Australian Consumer test and also the operation of the intermediary provisions.
There is still an opportunity to make submissions on these measures and given that Treasury has appeared to take onboard a lot of the feedback obtained, impacted taxpayers should use this opportunity to make any further comments on the ED to Treasury by Wednesday 21 October 2015.

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Australia – changes to the GST rules for online sales of goods

The Australian Federal Treasurer announced yesterday that it will be discussing GST measures with State Treasurers today with a view to announcing changes to the Australian GST rules for online sales of goods into Australia. You may be aware that currently goods sold into Australia under A$1,000 (approx. USD 730) are not subject to GST or duty.

At this stage, we do not have any details of the precise changes, but on the basis of statements made by the Treasurer, it is assumed that the measures are likely to involve a requirement for a non-resident seller to register and account for GST on the sales of all goods into Australia. Such a change may not impact on the current import rules, potentially meaning that goods imported into Australia below the current A$1,000 low value threshold could continue to remain free of customs duties. Find out more

New Zealand – Taxing by the megabyte – proposed changes to the GST treatment of the digital economy

As widely anticipated, the Government of New Zealand has released a discussion document on the GST treatment of digital products and other services purchased online by New Zealand consumers. The analysis in the discussion document is based on the OECD guidelines for applying GST to cross-border services and intangibles (e.g. music, movie, and game downloads).

In relation to imported goods, the Government has indicated that various challenges exist to devising a solution for low value goods imports (covered by the current so-called $400 threshold or the minimum duties / taxes $60 concession). Although the goods solution is expected to take more time, work is progressing on a solution for collecting duty / GST on imported goods in the most efficient way.

According to PwC New Zealand the discussion document demonstrates that the Government and policy makers have a desire to keep the GST model current for the digital economy. This is in line with recent OECD guidelines and developments in Australia, Europe, Japan, South Korea, and South Africa. The document also addresses matters of sound tax policy, tax leakage (estimated at $180 million per annum and growing) and fairness. The measures will go a long way to ensuring that consumption in New Zealand is taxed in the same way as domestic purchases of goods and Services.

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Australia – Budget announcement confirms GST obligation of non-established digital service providers

As anticipated in our recent post tonight’s Budget announced new law in relation to the GST treatment of digital products and other services imported by Australian consumers, based on the OECD guidelines for the taxation of cross-border intangibles. The new law will apply to supplies made on or after 1 July 2017. The closing date for the submission of comments on the draft legislation is 7 July 2015, which does not give affected taxpayers long to consult on the process.

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Australia – GST registration obligation for non-established e-service providers

On 9 April 2015, the Australian Treasurer announced that the government will be introducing new GST measures aimed at overseas companies supplying digital services into Australia. The Treasurer stated that “a company providing intangible services into Australia, such as media services or so on, wherever they are located they should charge GST on those services.”

Specific details of the proposed changes are not available yet, however, they are widely anticipated to be announced in the May 2015 Budget (on 12 May 2015).

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Australia: Results of the Low Value Import Relief review

The final report of the Low Value Parcel Processing Taskforce (“the Taskforce”) was recently released by the Australian authorities.

In a previous report in 2011 the Productivity Commission found that the low value import exemption threshold for GST and duty on imported goods (currently set at AUD 1’000) was not the main factor affecting the international competitiveness of Australian retailers (this is a totally opposite conclusion than the one made by the EU – see here for more info) . The Productivity Commission advised that there could be grounds to reduce the low value import relief threshold, but it is not cost-effective to do so without streamlining the procedure of processing low value parcels.
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