Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Taxing the Digital Economy

FOR IMMEDIATE RELEASE – 26TH MARCH 2014

Taxing the Digital Economy

“Proposals by the OECD aimed at addressing the tax challenges of the digital economy could have significant implications for New Zealand businesses and consumers.”
Peter Scott - KPMG’s head of indirect tax services

The proposals draw attention to the loss of GST revenue as the popularity of online shopping grows with Kiwi consumers.

Among the options canvassed by the OECD are the use of countries’ GST regimes to tax the digital economy and online sellers. The UK is the latest European country to move to tax cross-border internet sales at their domestic GST rate. The US Senate has recently approved legislation for State Governments to enforce collection of sales taxes by online retailers based in other States.

“Businesses around the world have been able to significantly increase their market and sales to customers in foreign jurisdictions through the use of online shopping. This has reduced the local GST revenue as these supplies via the internet result in little or no GST being collected. This presents a huge challenge for our traditional GST collection system.” says Scott.

The OECD suggests lowering or removing customs exemptions for low value imported physical goods. In New Zealand, there has been pressure from local retailers for Government to reduce the GST exempt import threshold of $400. This would satisfy the demands of “bricks and mortar” store retailers but Peter Scott points out, “There would be increased compliance costs for businesses and greater administrative costs to the Government.”

A New Zealand discussion document on lowering the GST exempt import threshold was due late last year, but has been deferred pending a wider review of BEPS [Base Erosion and Profit Shifting] issues by New Zealand officials.

“There is an obvious challenge in enforcing compliance from non-resident suppliers and this has been recognised by the OECD. Nevertheless, requiring non-residents to charge and collect GST has been identified by the OECD as the most viable option to protect GST collections,” according to Peter Scott.

“The reality is we are going to see some changes in New Zealand, and around the world, to collect GST on internet sales. In New Zealand, the challenge will be how quickly and effectively any changes can be implemented without imposing significant system and compliance costs.”

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

BusinessDesk: SkyCity Lifts Minimum Convention Centre Investment To $430M

SkyCity Entertainment Group, the casino operator, has lifted the minimum it will invest in the Auckland International Convention Centre to $430 million and said total costs including land may be $450 million to $470 million. More>>

Statistics: Drop In Dairy Prices Leads Fall In Exports

Total goods exports fell $240 million (5.5 percent) to $4.2 billion in April 2015 compared with April 2014, Statistics New Zealand said today. More>>

BusinessDesk: APN's NZME Sees Future In Paywalls, Growth In Digital Sales

APN News & Media has touted a single newsroom concept for its NZME unit in New Zealand, similar to what Germany's Die Welt uses, saying an 'integrated sales proposition' is helping it win market share, including ... More>>

Labour Party: Global Milk Prices Now Lowest In 6 Years

The latest fall in the global dairy price has brought it to the lowest level in six years and shows there must be meaningful action in tomorrow’s Budget to diversify the economy, says Labour’s Finance spokesperson Grant Robertson. “Dairy prices ... More>>

BusinessDesk: NZ Inflation Expectations Creep Higher In June Survey

May 19 (BusinessDesk) - New Zealand businesses lifted their expectations for inflation over the next two years, sapping any immediate pressure on the Reserve Bank to cut interest rates, and prompting the kiwi dollar to jump higher. More>>

BusinessDesk: Lower Fuel Costs Drive Down NZ Producer Input, Output Prices

May 19 - Producer input and output prices fell in the first quarter, mainly reflecting lower fuel costs and weakness in prices of meat and dairy products. More>>


Media: Fairfax Media NZ Announces Senior Editorial Team

Fairfax Media New Zealand has today confirmed its new editorial leadership team, as part of a transformation of its newsrooms aimed at enhancing local and national journalism across digital and print. More>>

Science: Flavonoids Reduce Cold And Cough Risk

Flavonoids reduce cold and cough risk Research from the University of Auckland shows eating flavonoids – found in green tea, apples, blueberries, cocoa, red wine and onions – can significantly reduce the risk of catching colds and coughs. The research, ... More>>

BusinessDesk: RBNZ House Alert Speech The Catalyst For Government Action

Prime Minister John Key all but conceded that pressure from the Reserve Bank of New Zealand for concerted action on rampant Auckland house prices was one of the main catalysts for the government's weekend announcements about tightly ... More>>

BusinessDesk: How To Fall Foul Of The New Housing Tax Rules: Tips From IRD

Just because you rented out your investment property doesn't absolve you from paying tax, says the Inland Revenue Department in a summary of commonly made mistakes by non-professional property investors when it comes to their tax liability.More>>

Legal: Superdiversity Law, Policy And Business Stocktake Announced

Mai Chen, Managing Partner at Chen Palmer New Zealand Public and Employment Law Specialists and Adjunct Professor of Law at the University of Auckland, today announced the establishment ... More>>

Housing: More House Price Gains Expected

House price expectations remain high, with a net 56% of respondents expecting house prices will increase. Fears of higher interest rates are fading, consistent with the RBNZ’s signals this year. Affordability and a lack of houses for ... More>>

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news