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New Zealand To Remove Low-Value Consignment Relief

by Mary Swire, Tax-News.com, Hong Kong

25 November 2019


New Zealand is to introduce GST on low-value goods sold by overseas retailers from December 1, 2019.

The obligation to collect New Zealand GST will apply to those offshore businesses who supply at least NZD60,000 of low-value goods – those worth up to NZD1,000 – per year.

Under the changes, New Zealand consumers will no longer pay tariff duty, an import transaction fee, or a biosecurity system entry levy at the border. New Zealand Customs will still collect these, and GST, if the goods supplies are worth over NZD1,000.

Until December 1, 2019, New Zealand Customs will continue to collect GST and tariff duty at the border on goods bought from overseas when the amount due is more than NZD60. This excludes most alcohol and tobacco products.

GST is already collected on online services and intangibles bought from overseas, such as software downloads, e-books, legal and accounting advice, and streamed movies and music.

The removal of these tax breaks was proposed by the OECD in Action 1 of its Action Plan on tackling base erosion and profit shifting, which focused on the tax challenges of the digital economy. Recommendations from this report were incorporated into the OECD's new international GST/VAT guidelines, which countries have been encouraged to adopt.

TAGS: tax | business | accounting | goods and services tax (GST) | offshore | New Zealand | tax breaks | retail | services | BEPS

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