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For real this time: De minimis loophole is to be closed

  • News
  • May 1, 2018
  • Sarah Dunn
For real this time: De minimis loophole is to be closed

After much lobbying and many stops and starts, the Government has confirmed a proposal to require overseas vendors selling into New Zealand to register and collect GST on all goods at the moment of sale. The proposed legislation is to take effect from 1 October 2019.

The existing system sees only items sold into New Zealand online for over $400 subject to GST, which is collected at the border. All goods sold online to Kiwis by foreign companies for less effectively are GST-free, giving overseas retailers a tax advantage against their New Zealand equivalents that Retail NZ general manager for public affairs Greg Harford has described as a “systemic competitive disadvantage” for Kiwi retailers.

“GST is supposed to be a universal tax on consumption in New Zealand, but that has been undermined by the steady growth of online shopping and the rise of foreign websites selling into New Zealand,” Harford says.

He says the previous Government’s delay on moving against this issue seriously impacted New Zealand retail businesses, but today’s announcement has meant Kiwi retailers can now focus on delivering great customer experiences, without suffering “a competitive disadvantage imposed by Government.”

Customs Minister Meka Whaitiri explains that the law changes announced today will see offshore suppliers required to 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 mean some goods will become more expensive, and some less, but the tax treatment on goods above $400 will not change.

“This will simplify compliance and administration costs at the border. This supports the focus of Customs to make cross-border transactions easier without compromising the need to keep out illicit substances and materials,” says Whaitiri.

The changes will come into effect from 1 October next year. Revenue officials conservatively estimate that $53 million would be collected in 2019/20, increasing to $78 million in 2020/21 and $87 million in 2021/22.

Revenue and Small Business Minister Stuart Nash came under scrutiny for “jumping the gun” on the de minimis announcement in November 2017, when he confirmed offshore retailers will be required to pay GST on goods under $400 sold into New Zealand online before pulling back in the days following.

“There are more than 26,000 small businesses employing more than 62,000 people in the retail sector,” Nash said today. “Many are in competition with foreign firms who enjoy this tax break. Local firms compete on an uneven playing field. Large multinationals sell exactly the same product into our market without collecting GST.

 “Small businesses such as bookshops have convincingly argued they are penalised by a system which is badly out of date. It’s particularly difficult for very small shops outside the main centres. Some Kiwi firms are doubly disadvantaged, as online retailers who sell into Australia will soon pay GST to the Australian Tax Office,” Nash says.

Nash has also acknowledged the work of the previous Government in beginning the project which culminated in these changes.

The Government is now inviting feedback on the proposed changes. Submissions are due by 29 June 2018, and more details can be found on the IRD's website here

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Kiwi Property makes $138m net profit for the year

  • News
  • May 21, 2019
  • Radio New Zealand
Kiwi Property makes $138m net profit for the year

Kiwi Property has reported a strong full year underlying profit, as it continues to reinvest in its Auckland retail and office properties.

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Thankyou’s latest campaign combines scent and charity work

  • News
  • May 21, 2019
  • StopPress Team
Thankyou’s latest campaign combines scent and charity work

Australian charity product organisation Thankyou has launched its latest Kiwi campaign, combining that fact that 100 percent of its profit goes towards helping end global poverty with its use of perfume-grade botanical oils in its products.

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From edible insects to beautiful homeware: Made of Tomorrow’s co-founder talks its new venture

  • Design
  • May 21, 2019
  • Idealog
From edible insects to beautiful homeware: Made of Tomorrow’s co-founder talks its new venture

Most people would be in agreement that bugs, planters and room dividers don’t have much in common, but Matt Genefaas and Dan Craig would beg to differ. The two juggle running an edible insect company, Crawlers, as well as a homeware company, Made of Tomorrow. Genefaas has a chat about what the new furniture range, Space Between, was inspired by, as well as how him and Craig spend their days in slashie roles moving between pushing dried insects to the world, as well as polished mirrors and space dividers.

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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.

 
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Why is the next generation so anxious? Here's how young founders can avoid burn-out

  • Opinion
  • May 21, 2019
  • Jennifer Young
Why is the next generation so anxious? Here's how young founders can avoid burn-out

There may be good reason to be concerned about our young entrepreneurs. Millennials and Generation Z have been labelled generation burn-out, generation snowflake and described as narcissistic, entitled, tech-dependent and fragile. They’re also oversaturated with headlines about the raft of issues like climate change they have to tackle, plus concerns about the impact of technology and social media on their mental health. Jennifer Young explores possible reasons why the younger generation is so anxious, as well as what young founders can do to avoid burn-out.

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Vodafone NZ sold to private investors for $3.4b

  • News
  • May 21, 2019
  • Radio New Zealand
Vodafone NZ sold to private investors for $3.4b

Infrastructure investor Infratil is teaming up with a Canadian investment firm to buy the local operations of Vodafone for $3.4 billion.

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Readings present revised plan for Courtenay Central

  • Property
  • May 16, 2019
  • Radio New Zealand
Readings present revised plan for Courtenay Central

The company that owns Courtenay Central in Wellington says it has big plans for redeveloping the complex - which is closed due to earthquake risks.

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