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New Zealand Tweaking GST Rule Changes For Offshore Suppliers

by Mary Swire,, Hong Kong

13 June 2019

New Zealand's Finance and Expenditure Committee has recommended changes to legislation that would introduce a new requirement for offshore suppliers to collect GST on low-value goods supplied to New Zealand-based consumers.

Under the new regime, offshore suppliers would be required to register for GST with Inland Revenue just as New Zealand domestic retailers are.

The Committee has recommended delaying the commencement date for the proposed new GST rules to December 1, 2019, rather than October 1, 2019.

It said this will provide suppliers with a further two months to adapt their systems and technology to ensure compliance.

For contracts entered into before December 1, the committee recommended inserting a new clause to allow a supplier to treat payments made after December 1, 2019, under contracts entered into before the application date as not being subject to the new GST rules, for the term of the agreement or up to 396 days from the date the contract was entered into, whichever is earlier.

The Committee has also recommended reducing the threshold for suppliers wishing to return GST on high-value goods.

The current proposals would allow offshore suppliers to elect to collect GST on goods valued above NZD1,000, provided that 95 percent of the total value of their sales to New Zealand are items valued at less than NZD1,000.

The Committee anticipates that this rule should reduce compliance costs for suppliers by removing the need to distinguish between low- and high-value goods where sales of high-value goods are relatively small. However, it considers the 95 percent threshold too high to effectively meet this purpose and recommends amending the threshold to 75 percent.

TAGS: compliance | Finance | tax | goods and services tax (GST) | offshore | legislation | New Zealand | retail | services | BEPS

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