New Zealand new push on GST on foreign e-commerce sales

The New Zealand government is to open a public consultation on the idea of levying New Zealand Goods and Services Tax on sales to consumer of goods by foreign websites.

Current, foreign online retailers of goods can sell to consumers in New Zealand without have to register as a non-resident tax payer and charge New Zealand GST.  New Zealand GST is currently 15% since 2010.

Whilst attractive to consumers, put puts pressure on domestic retailers who must charge GST.  US retail giant, Amazon, in particular has drawn much criticism as it can sell to New Zealand consumers GST free from the US.

This compares to the European Union where VAT 'distance sellers' as they are termed must charge the EU VAT rate of the country of the consumer.  There is a distance selling VAT registration threshold.

The New Zealand government is also concerned about this loss of revenues.  It is estimated that the government is losing up to NZD 300 million per annum because consumers can import goods GST free from online shops.  The main block in the past has been the potential cost of administering and auditing revenues from potentially hundreds of foreign retailers who would have to VAT register.

Australian GST on foreign e-commerce was kicked into touch last week.