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

 

Statistics: Net Annual Migration Passes 71,000

A record 71,300 more migrants arrived in New Zealand than left in the January 2017 year, Statistics New Zealand said today. This surpassed the previous annual record set in December 2016. More>>

ALSO:

Fossils: Ancient Penguins Lived Alongside Dinosaurs?

Penguins are much older than previously thought and their evolution probably dates back to the days of the dinosaurs, according to research on the fossilised leg bone and toes of a giant ancient penguin found in rocks near Waipara, North Canterbury. More>>

No Voda/Sky: Commission Declines Clearance For Merger

The Commerce Commission has declined to grant clearance for the proposed merger of Sky Network Television and Vodafone New Zealand. More>>

ALSO:

EARLIER:

Power: IEA Report On New Zealand's Energy System

Outside of its largely low-carbon power sector, managing the economy’s energy intensity and greenhouse gas emissions while still remaining competitive and growing remains a challenge. More>>

ALSO:

NASA: Seven Earth-Size Planets Around A Single Star

NASA's Spitzer Space Telescope has revealed the first known system of seven Earth-size planets around a single star. Three of these planets are firmly located in the habitable zone, the area around the parent star where a rocky planet is most likely to have liquid water. More>>

ALSO:

Auckland Transport Case: Men Guilty Of Corruption And Bribery Will Spend Time In Jail

Two men who were found guilty of corruption and bribery in a Serious Fraud Office (SFO) trial have been sentenced in the Auckland High Court today... The pair are guilty of corruption and bribery offences relating to more than $1 million of bribes which took place between 2005 and 2013 at Rodney District Council and Auckland Transport. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news