A significant GST matter reflecting brave new policy globally
The NZ Government announced last week that it is seeking consultation on the best way to collect GST on online purchases, by private NZ consumers, of imported low value goods (LVGs) under NZ$400 (approx. USD 280). If enacted, the new rules will apply from 1 October 2019.
This is a significant issue which has been discussed by the OECD, governments and regulators around the world. If enacted as currently proposed, the new LVG rules will be broadly consistent with the introduction of NZ’s remote services rules (implemented in October 2016).
The March 27, 2018 Québec budget proposes to expand the mandatory Québec Sales Tax (QST) registration rules for non-residents of Québec making digital supplies to Québec recipients. Specifically, registration will be required for:
non-residents of Canada that make supplies of incorporeal moveable property (IPP) and services to specified Québec consumers
residents of Canada that reside outside Québec and make supplies of corporeal moveable property, IPP and services to specified Québec consumers.
For further Information, please see the attached Newsletter.
We are delighted to invite you to our next global indirect tax webcast :
South Africa: VAT on the supply of electronic services -proposed reforms
Date: 9 April 2018
Time 3pm BST, 10am Eastern
South Africa has proposed extensive reforms for electronic services supplies (“ESS”) which were announced in the draft electronic services Regulation on 21 February 2018. The draft regulation would repeal the current Regulation that sets out those services that are regarded as “electronic services”. The new Regulation if enacted will come into effect on 1 October 2018.
In this webcast we’ll focus on the following aspects:
The current electronic services Regulation
Proposed changes to the Regulation and a discussion on which services may now fall under ESS
Who is required to register and account for VAT in South Africa?: The concept of electronic agent, B2B/B2C distinction
We will also discuss other aspects that businesses need to consider including the VAT registration process and filing timeframes.
You will also be able to ask the panel questions during this live webcast.
Following years of changes in the indirect tax area, now also from direct tax side comes an EU proposal that will bring significant changes in the taxation of online businesses. Both the draft directive concerning long-term solution and the interim solution could bring radical changes for companies with a “significant digital presence”.
The NZ remote services (RS) rules have been in force since 1 October 2016 and are regarded as a remarkable success by NZ Inland Revenue. Over 150 offshore sellers have registered and more than NZ$125 million of annual GST has been generated – the GST collected is more than 4 times the original estimates. NZ Inland Revenue deserves credit for the informative education campaign on the RS rules and efficient service when the rules first came in.
The Swiss VAT law was recently changed. From 1 January 2018 onwards, any person or business with global turnover of CHF 100’000 or more may be liable to VAT starting from the first Swiss franc of turnover in Switzerland. This means that if you want to continue doing business in Switzerland, you need to register with the tax authority.
If you are looking for a solution that allows you to continue doing business in Switzerland without breaking the bank, PwC’s Smart VAT may be the right option for you. PwC’s Smart VAT is an online platform that allows you to do the following:
Register for Swiss VAT and obtain a Swiss VAT number
Appoint PwC as your fiscal representative to deal with the tax authority.
Register for filing the quarterly Swiss VAT returns by electronic means
Prepare quarterly VAT returns for electronic filing
Access letters and queries from the tax authority and provide your replies
The European Parliament has backed, by 590 votes to 8 with 10 abstentions, the EU Commission’s proposal to bring the VAT treatment of electronic publications into line with those publications to which the Member States can apply a reduced rate. The proposal now requires unanimous approval by the EU Council.
1 July 2017, supplies of things other than goods or real property made to an ‘Australian consumer’ will be connected with Australia and subject to GST. The Australian provisions are broader than some other jurisdictions and essentially anything other than goods or real property are caught, and if an entity’s GST turnover exceeds the registration turnover threshold of AUD 75,000, it would be required to register for GST in Australia. Non-resident suppliers will be able to access a limited and simplified GST registration, although they can also register under the full registration procedure.
Where supplies of inbound intangibles are made through an Electronic Distribution Platform (EDP), the GST liability on these supplies would shift to the operator of the EDP (i.e. generally, online marketplaces that act as intermediaries). The Australian Taxation Office (ATO) has released a draft Law Companion Guideline (LCG 2017/D4) dealing with the EDP provisions.
In addition, under proposals still before Parliament (the Treasury Laws Amendment (Goods and Services Tax (GST) Low Value Goods) Bill 2017), low-value goods (AUD 1,000 and under) supplied by overseas retailers to Australian consumers would become taxable supplies beginning 1 July 2017. The Bill was referred to the Senate Economics Legislation Committee which recommended that the implementation of the measures be delayed to 1 July 2018. The Bill is listed to be debated in Parliament in June 2017.
Please see the attached newsletter for further details.
Are you an offshore business supplying digital content (such as movies, music, games, downloads, apps, e-books) or remote services (such as softwre, gambling, webinars, web design, e-publishing) to New Zealand customers?
Do you provide more traditional online services (such as IT, consultancy, legal advisory or insurance)?
Do you provide an electronic platform for a principal offshore supplier of digital products and services?
If the answer is affirmative on any of the above question, please watch the recording of our webcasts where specialists from our New Zealand ITX practice will discuss changes to GS for remote sellers of digital services.
Time: 20 April 2017 at 8:30am AEST, (12:30 am CET, 6:30 pm Eastern 19 April 2017)
On 1 July 2017 new GST rules will apply on the supply of inbound intangibles to Australian consumers. There are also proposed measures to introduce GST on the Import of Low Value Goods into Australia. With less than three months until the commencement of the Inbound intangibles measures and potentially the low value goods measures, this webcast will be an opportunity to hear from both PwC Indirect Tax Specialists (Brady Dever, Partner and Suzanne Kneen, Director) and Senior Members of the Australian Taxation Office (ATO), Adrian Preston-Loh (Assistant Commissioner, Internationals, Indirect Tax) Amy James-Velagic (A/g Assistant Commissioner, GST Technical Product Leadership, Indirect Tax) and Jo Drum (Director, GST Technical Product Leadership, Indirect Tax).
PwC will provide an overview of these measures including details on when suppliers will be liable under the new system (highlighting some of the differences in the Australian legislation) and some of the practical questions that have arisen in determining whether sales are made to “Australian consumers” and an overview of the limited registration process and simplified reporting works. The ATO will provide insights into some of the practical issues; the ATO’s implementation strategy for this new system; and the ATO’s approach and compliance strategies for the proposed new law.
PwC and the ATO will provide an update on the low value goods measures (these are proposed to commence from 1 July 2017 but have not yet been passed by Parliament, but have been referred to the Senate Economics Committee which will be reporting back on the measures in early May).
You will have an opportunity to ask questions and interact with the ATO. This is a great opportunity to hear directly from the ATO, to understand the current approach of the ATO in addressing these matters and to convey practical considerations you are experiencing. Please click here to register https://event.webcasts.com/starthere.jsp?ei=1139220
Please note that due to time zone differences we will also have a recorded version of the webcast available afterwards.