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
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.
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.
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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:
- 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.
- 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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As previously reported here and here the amended South Korean VAT law for the supply of e-services from overseas has been effective since 1 July 2015. Accordingly, overseas service providers shall apply for the simplified business registration by 20 July 2015.
The Korean National Tax Service (“NTS”) recently issued a notification indicating that the website for the application of simplified business registration is still under construction. The website is expected to go-live on 10 July 2015. If a taxpayer would like to apply for the registration earlier than that, it is possible to complete a registration form and submit it via email to the NTS.
For further information please contact Changho Jo of PwC Korea or me.
Further to our previous posts on the Japanese Consumption Tax changes (here, here, here and here), at a recent explanatory session by the Japanese National Tax Agency (NTA) on 9 June 2015 the NTA advised that the special indication “the supplier is liable to account for consumption tax” on B2C invoices can be replaced by implying that the sale price is inclusive of consumption tax. E.g. “JPY 108,000 yen (including 8% consumption tax of JPY 8,000)”. In addition the registration number of a Registered Offshore Business Person is still required to be included in the invoice.
However, given the new Consumption Tax Law which still clearly stipulates that input tax credit on a taxable purchase of B2C Telecommunication Online Services on or after 1 October 2015 is only possible if the supplier is a “Registered Offshore Business Person” and the invoice or purchase receipt (which can be prepared electronically) includes the registration number of the supplier and the special indication that the supplier is liable to account for consumption tax. If there is no such indication on the B2C invoice, a business customer should ask for re-issuing the proper invoice pursuant to the new Consumption Tax Law to ensure the deductibility of input consumption tax.
For reference please also see PwC Japan’s newsletter of 12 June 2015 on “New Japanese consumption tax rules on cross-border digital services”.
For further information please contact Kotaku Kimu of PwC Japan or me.
The Belgian tax authorities submitted questions to the VAT Committee regarding the notion of electronically supplied services as referred to in the EU VAT Directive and the Implementing Regulation, the possible interaction of this type of services with other services and the issue of VAT exemption of such services.
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As already anticipated in 2013 Luxemburg will increase its VAT rates as of 1 January 2015 to balance the loss of VAT resulting from the new B2C 2015 changes.
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