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New GST rules to level playing field

Overseas companies selling goods online into New Zealand will soon be required to collect GST in the same way as domestic retailers.

Speaking at the Chartered Accountants Australia New Zealand tax conference today, Stuart Nash said that new rules would be aimed at imported goods valued at or below $1,000. Customs would retain responsibility for collecting GST on imported parcels valued more than $1,000.

“There are about 26,000 small businesses in New Zealand employing more than 62,000 people in the retail sector. Many are in competition with foreign firms who sell exactly the same product into our market without collecting GST,” says Mr Nash.

“We intend to make offshore suppliers collect GST on low value goods at the moment of sale, and in turn, buyers of these goods will no longer pay Customs tariffs or border security and biosecurity fees. This will simplify compliance and administration costs at the border.

“GST has been collected on services and digital products from offshore, such as streamed movies and music, since 2016. This extends that to goods.

“With the steady growth in online shopping from offshore suppliers, a significant amount of tax revenue is being lost. Mostly though, it’s a matter of fairness so the sooner we get this in place the better. This measure aims to help level the playing field and improve the integrity of our tax system.

“Our new rules have been endorsed by the Tax Working Group and will be broadly similar to those introduced by Australia in July. The EU has also committed to following this approach,” says Mr Nash.

More details can be found at: http://taxpolicy.ird.govt.nz/news/2018-10-18-proposed-new-rules-gst-low-value-imported-goods-announced