Close
 

New Zealand could introduce ‘Netflix’ GST tax from next year

  • News
  • November 16, 2015
  • Elly Strang
New Zealand could introduce ‘Netflix’ GST tax from next year

Legislation has been introduced to Parliament for a ‘Netflix’ tax. This has been expected, as Revenue Minister Todd McClay released a discussion paper on the matter in August.

The digital goods tax would apply to digital services and intangible products, including music, videos, software and e-books.

Overseas companies that sell more than NZD$60,000 to Kiwis in a 12-month period will be required to register with Inland Revenue and collect GST.

This is the first step towards charging GST on other goods and services bought online, including apparel and electronics.

McClay says it will create a level playing field between overseas and local suppliers.

“GST should apply to all consumption that occurs in New Zealand. This is what makes our GST system fair, efficient and simple,” says McClay.

“The growth of online digital and overseas services means the volume of services on which GST is not collected is an increasing challenge – for the Government in terms of the GST revenue foregone, and as a matter of fairness for New Zealand suppliers of services and intangibles who must account for GST in their pricing structures.”



Retail NZ general manager of public affairs, Greg Harford, says the Bill is a wasted opportunity to level the playing field for all Kiwi retailers.

"This bill further delays addressing the issue of low-value goods which is a long-standing and significant problem that disadvantages domestic retailers and has negative repercussions for the whole economy,” Harford says.

"If we are going to have GST, it needs to apply across the board."

The proposed new rules would come into force on 1 October 2016.

Australia is planning on introducing similar rules that will apply from 1 July, 2017.

Booksellers NZ has criticised the proposed bill, with chief executive Lincoln Gould saying it only suits big businesses, not small ones.

"Minister McClay talks of fairness and creating a level playing field. The Bill goes only halfway to rectifying the GST problem with foreign retailers and benefits only big businesses engaged in selling videos, music and e-books,” he says.

“It does not help small retailers, such as bookshops, that face an ever-increasing uneven playing field, where they have to collect GST for the government on the sale of small value goods, while the offshore online retailer does not."

While the new legislation applies only to online services, McClay says GST low-value, imported goods that aren’t currently being taxed are also a concern to the Government.

This threshold is the hot issue for retailers. It lets low value physical goods, like clothes, books and electronics between $225 to $400, enter the country tax-free.

“The growing volume of imported goods means the amount of foregone GST is continuing to increase and raises concerns for domestic suppliers,” he says.

He says Customs is expected to release a consultation document in April 2016 that will seek public feedback on applying GST to low-value, imported goods.

“The Government realises this is an important issue for New Zealand retailers,” he says.

“However we are not willing to move unreasonable cost or inconvenience on to consumers. For this reason, Customs has been asked to work through a number of logistical issues with stakeholders and is expected to release a consultation document in April 2016 that will seek public feedback on the practical implications of options to streamline the collection of duty, including GST, on low-value imported goods,” McClay says.

Harford said it makes no sense that Amazon will be required to collect GST on the sale of an e-book, but not on the sale of a printed book. 

Gould questioned the time frame.
 
“It is unclear why Customs takes any longer to rectify this issue than the Department of Inland Revenue, given the years that it has been on the table. And the recently released guidelines on the issue from the OECD pointed a way forward, which other countries have followed already,” he says.

A recent survey by MYOB found that 41 percent of those surveyed in the retail and hospitality industry said they’d vote for GST on online low-value goods to be introduced, while 31 percent were against it.

Other sectors outside of retail are also growing more supportive of the initiative.

​ ​

This is a community discussion forum. Comment is free but please respect our rules:

  1. Don’t be abusive or use sweary type words
  2. Don’t break the law: libel, slander and defamatory comments are forbidden
  3. Don’t resort to name-calling, mean-spiritedness, or slagging off
  4. Don’t pretend to be someone else.

If we find you doing these things, your comments will be edited without recourse and you may be asked to go away and reconsider your actions.
We respect the right to free speech and anonymous comments. Don’t abuse the privilege.

 

H&M's 2019 designer collab will be with Giambattista Valli

  • News
  • May 24, 2019
  • Sarah Dunn
H&M's 2019 designer collab will be with Giambattista Valli

H&M's designer collaborations are met with global consumer excitement. Last year, Moschino was the chosen brand, and for 2019, it's Paris-based Giambattista Valli.

Read more
 
 

Karen Walker brings back its preloved Dove Hospice pop-up

  • News
  • May 24, 2019
  • The Register team
Karen Walker brings back its preloved Dove Hospice pop-up

After a successful debut last year, Karen Walker is bringing back its Dove Hospice pop-up at the Newmarket 'Playpark' store. It will once again sell vintage hand-knitted items to fundraise for the hospice charity.

Read more
 
 

Countdown's Own wins April's Ad Impact award

  • News
  • May 23, 2019
  • StopPress Team
Countdown's Own wins April's Ad Impact award

With an April full of public holidays and potential long weekends, the month was a big and busy month for advertising. But Countdown's own-brand campaign surpassed the competition to be named the Colmar Brunton Ad Impact Award winner for April.

Read more
 

Social scoreboard

Zavy and The Register have worked together to create a scoreboard that compares how the top 25 traditional media advertising spenders in New Zealand have performed on social media over the past 30 days, updated in real time.

 
topics
Regional rollercoaster
What does retail look like in 2019 for ...
Concept to closet
Business coverage of New Zealand Fashion Week.
Town centres
A positive retail environment over the past 12 ...
Amazon Arrival
Keeping up with all things Amazon as it ...
The Retail Yearbook 2017
As we battle our way through the busiest ...
Hospitality enhancing retail
Some think food and integrated hospitality offerings will ...
The future is bright
We spoke with four retailers in their twenties ...
Spotlight on signage
At first glance, the humble in-store sign might ...
Red Awards 2016
The Red Awards for retail interior design celebrate ...
Auckland Unitary Plan
Auckland is changing. The Unitary Plan will decide ...
How to open a store
Sarah Dunn considers what it would take to ...
All things to all people
Kiwi retailers share their omnichannel strategies.
Rising stars
Retail's top young achievers.
Delivering on your promises
The sale isn't over until your item is ...
Retail in heartland New Zealand
Retailers keep the regions pumping, but how strong ...
Sisterhood
Women in retail help one another. We spoke ...
The changing face of retail
Shifting demographics are creating big changes in New ...
The retail yearbook
With the help of experts in the retail ...
Retail rogues
We put the spotlight on staff training. Jai ...
Here come the giants
Topshop has arrived in Auckland’s CBD, David Jones ...
From retail to e-tail
Ecommerce has become part of the way mainstream ...
Window shopping: A spotlight on social media
Sarah Dunn and Elly Strang look at how ...
Loyalty in the digital age
How are retailers maintaining loyalty? Sarah Dunn, Elly ...
The Innovators | In partnership with Spark Business
Technology is rapidly changing the retail industry as ...
 

Kiwi fashion label Maggie Marilyn launches new website

  • News
  • May 23, 2019
  • The Register team
Kiwi fashion label Maggie Marilyn launches new website

The new website launched by New Zealand fashion label Maggie Marilyn prioritises transparency and sustainability.

Read more
 
 

Sharesies CEO Brooke Roberts talks what it takes to become a B Corp certified company

  • News
  • May 23, 2019
  • Courtney Devereux
Sharesies CEO Brooke Roberts talks what it takes to become a B Corp certified company

There’s a movement afoot globally to create more companies that balance purpose with profit and view business as a force for good. Called Certified B Corporations, companies that meet the highest standards of social and environmental performance, public transparency and legal accountability can become certified. As of April, Sharesies investment platform was the first financial company nationally to qualify for the B Corp certification, joining just 22 other New Zealand B Corp certified businesses. CEO Brooke Roberts talks us through the process, and the benefits for businesses in becoming certified.

Read more
 

The benefits of rewarding non-transactional activities

  • Opinion
  • May 23, 2019
  • Ros Netto
The benefits of rewarding non-transactional activities

Product and price is all very well, but retailers are increasingly seeking to avoid discounting by incentivising non-transactional behaviours instead. Ros Netto, consultant at Truth Customer Academy, shares some advice.

Read more
 
Next page
Results for
Topics
Jobs
About us.

The Register provides essential industry news and intelligence, updated daily. And the digital newsletter delivers the latest news to your inbox twice a week — for free!

©2009–2015 Tangible Media. All rights reserved.
Use of this site constitutes acceptance of our Privacy policy.

Advertise
The Register

editor@theregister.co.nz

Content marketing/advertising? Email anita.hayhoe@icg.co.nz or call 022 639 3004

View Media Kit

}