New Zealand businesses selling across the Tasman should take a close look at GST changes in Australia, effective from 1 July 2017.
Peter Scott, a KPMG Partner who specialises in GST, says New Zealand businesses selling across the Tasman should take a close look at GST changes in Australia.
From 1 July 2017, Australia will impose its GST on foreign businesses supplying digital content (such as music and software), or services (including consulting, legal, or gambling services), to Australian consumers.
This will mean New Zealand businesses may have to register and pay Australian GST if they have sales of more than A$75,000 to Australian customers (excluding Australian GST-registered businesses). Affected Kiwi businesses need to prepare and have the systems in place to comply with these requirements, says Scott, including determining whether customers are Australian residents and registered for GST.
Australia is not the only country going down this road. From 1 October 2016, New Zealand will introduce a similar “remote services” rule for non-resident businesses to register and pay GST on supplies into New Zealand. Other countries bringing in these rules include Japan and South Korea, while the European Union has already introduced rules for digital services.
Depending on the markets New Zealand businesses export to, these increasingly global “remote services” GST rules, could impost significant compliance costs.
KPMG in Australia has prepared a brief commentary on the Australian GST changes. Further information on the New Zealand GST on “remote services” rule can be found in Taxmail.
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