- Harleys on tour for another year
- Regions monitor remnants of Cylone Gita
- Fraud victims to contact police
- Thunderstorms loom over Bay of Plenty
- Rethinking trade waste
- Toxic slugs suspected in dog deaths
- A dozen Kaiaua houses uninhabitable
- Prepping for tonight’s high tide
- Evacuations and road closures
- Serious crash in Coromandel
- Sister’s plea: help find my brother
- Waihi high hazard zone ground movement
- Civil Defence issues tsunami warning
- Red Fox cold case re-opens
- Four dead, two injured in Waikato crash
Online purchases set to get GST
Posted at 4:10pm Tuesday 10 May, 2016
Purchases made online will be subjected to GST from October 1, this year says Revenue Minister Michael Woodhouse after it passed its third reading in Parliament today.
The Taxation (Residential Land Withholding Tax, GST on Online Services and Student Loans) Bill now means all cross-border purchases by New Zealand residents of services and other items bought through offshore providers will be subject to GST.
Michael says collecting GST from the growing volume of online sales across borders has been an issue of growing concern for some time, so the passing of this legislation marks an important first steps.
“Currently New Zealand providers are at an unfair disadvantage because they must apply GST to their services, whereas overseas providers do not. This creates an unfair playing field which this legislation will eliminate.”
Other measures in the Bill passed, include the introduction of a residential land withholding tax and an information exchange of student loan borrower details with Australia.
“These measures are also about ensuring fairness across our tax system,” Michael says.
“If a property has been bought and sold with the intention of making a gain, those gains have always been taxable. But it can be difficult for Inland Revenue to collect tax from the proceeds of such sales from foreign owners with no, or limited, presence in New Zealand.”
That’s why the residential land withholding tax builds on the new bright-line test and is aimed specifically at offshore vendors. This will be collected from the offshore seller at the point of sale and becomes payable from July 1, 2016.
“This change will help ensure that the lawful amount of tax that should be paid is collected.”
The third major measure passed will help Inland Revenue stay in contact with student loan borrowers in Australia, which helps ensure people continue to fulfil their loan obligations.
“The new measure enables an information exchange with Australia, providing Inland Revenue with the contact details of borrowers living in Australia,” Michael says.
“Most loan borrowers do the right thing and make repayments on time – this change will just help to ensure a higher level of compliance from borrowers living in Australia.”