Reflections on the New Zealand GST experience with the remote services rules and the future of GST on low-value imported goods

Abstract

The indirect taxes e-commerce supernova hit New Zealand in 2016 upon enactment of the remote services (RS) rules—dubbed the ‘Netflix tax’. At the same time as the RS rules were introduced, it was widely recognised in New Zealand that the current GST treatment of low-value imported goods also needed to be reviewed. As discussed below, the design of the rules for low-value imported goods is still being reviewed due to the complexity in this area. Cross border transactions involving goods raise various challenges and, in order to be successful, require a solution that is both efficient and user friendly. This article reflects on the key features of the New Zealand GST landscape in the e-commerce and digital area as a lesson for other countries who are thinking about introducing similar rules or altering their current rules. The first section looks at the RS rules and the second section looks at the latest developments concerning low-value imported goods.