The latest New Zealand low value imported goods changes are another of many occurring globally in the e-commerce indirect taxes area. On December 5, 2018 the New Zealand government introduced into Parliament the Taxation Bill that is a landmark development proposing new rules that will require offshore sellers, from October 1, 2019, to register and account for Goods and Services Tax (‘‘GST’’) at 15 percent on supplies of low value imported goods (‘‘LVIGs’’) if sales to New Zealand private consumers in a 12-month period exceed NZ$60,000 ($41,380). The $60,000 threshold is the same GST registration threshold that applies to domestic businesses and offshore suppliers of cross-border remote services.
For detailed information please see the below link or the attached article from Eugen Trombitas, PwC NZ Partner and PwC Global E-commerce indirect taxes leader, published in Bloomberg International Tax News.
The e-Commerce VAT package of the EU introduces simplification measures for intra-EU sales of electronic services from 2019 onwards, and also extends by 2021 the Mini One-Stop Shop to a One Stop Shop. Furthermore, new rules for electronic interfaces such as marketplaces or platforms will be introduced, which deem them for VAT purposes (in certain scenarios) to be the supplier of goods sold to customers in the EU and make them collect and pay the VAT on these sales.
Detailed implementation rules have been published în December on:
the extension of the scope of the Mini One Stop Shop (MOSS) to all types of services as well as to intra-community distance sales of goods and distance sales of imported goods from third countries – turning the MOSS into a One Stop Shop; and
the introduction of special provisions applicable to operators of electronic marketplaces, platform, portal or similar means with the effect that the these persons may be deemed to have received and supplied the goods itself applying from 1 January 2021.
The Proposal is available via this LINK and contains more detailed explanations of the following specific provisions.
A panel of specialists from across PwC’s indirect and direct tax practices will discuss the EU Commission’s proposed implementing regulations for 2020-21 and the consequent indirect tax, customs, direct tax and technology systems implications.
Australia, as well as many other jurisdictions including New Zealand and Switzerland, are implementing new rules regarding the application of the goods and services tax (GST) or value added tax (VAT) to the supply of low value goods to consumers.
Changes are expected from April 2019 concerning the taxation of electronic services in South Africa. All non-resident suppliers of e-services (if not specifically excluded from the revised regulations) will have a potential VAT registration liability in South Africa if the total value of their supplies exceeds R1 million (approx. 70’000 USD) in any twelve-month period.
For further details, please see the tax alert from PwC South Africa:
Comments are due 30 November 2018. The key substantive sections seem to be located in the Appendix, which sets out some of the items being considered in terms of potential unilateral “interim” measures pending broader OECD alignment – both digital advertising and online marketplace operators are mentioned as potential target taxpayers/services and a digital services tax or some similar type of tax on revenue is certainly being considered closely.
Please see further details in PwC Australia’s information leaflet:
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”.