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: Dairy And Travel Still Our Largest Export Earners

New Zealand earned $2.3 billion more from exports than we spent on imports during the year ended June 2015... total exports of goods and services were $67.5 billion, while total imports were $65.1 billion. More>>

ALSO:

Approval: Air New Zealand And Air China Launch New Alliance Route

Air New Zealand and Air China have today launched joint sales for a new daily direct service between Auckland and Beijing after receiving approval from New Zealand Minister of Transport Hon Simon Bridges to form a strategic alliance. More>>

ALSO:

Money Trading: FX Trader Jin Yuan Finance Warned Over Lack Of Monitoring

Jin Yuan Finance, an Auckland-based foreign exchange trader, has been warned over its lack of anti-money laundering processes in place in the first public notification by the Department of Internal Affairs. More>>

ALSO:

Auckland Surge, Possible Peak: House Values Accelerate At Fastest Annual Pace In 8 Years

New Zealand residential property values rose at their fastest annual pace in eight years in August, pushed higher by overflowing demand in Auckland, which is showing signs speculators think it has reached its peak, according to Quotable Value. More>>

ALSO:

Cash Money: Reserve Bank Launches New $5 And $10 Banknotes

The $5 and $10 final banknotes were revealed at an event at the Bank in Wellington, and will start to be released from mid-October 2015. More>>

ALSO:

Truck Sales Booted: Commerce Commission Files Charges Against Mobile Trader

The Commerce Commission has filed charges against a mobile trader, or truck shop operator, claiming he obtained money from customers by deception and never intended to supply them with the goods they paid for. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news