The New Zealand Government has finally announced the start date for GST (at 15%) on low value imported goods to be 1 December 2019. The low value goods threshold is NZD 1,000 and the annual GST registration threshold is NZD 60,000. The law is likely to be passed in July and this does not give impacted sellers and platforms a lot of time to prepare. PwC NZ ITX practice has prepared the attached 2-page summary of key decision points. Inland Revenue will release more detailed guidance in July.
Key decision points
Contact: Eugen Trombitas (PwC NZ) at email@example.com
With effect from 1 January 2019, a new rule has been introduced in Germany to make the operator of an online marketplace jointy liable for German VAT no accounted for by the online traders on goods sold via the marketplace.
For further details please see the newsflash from PwC Germany:
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.
NZ GST article
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.
Find out more
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:
The Australian Treasury released its digital economy tax discussion paper:
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:
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.
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”.
Please see PwC Newsletter for further detail
PwC Newsalert EUDTG
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.
You can find further Information on the vote in the attached proposal (see below link) and on the European Parliament’s Website.
Reduced rate on e-books