Government Eyes GST Changes
April 24, 2012 New Zealand Taxation
The government is looking at overhauling the GST system to remove barriers for foreign businesses wanting to work in New Zealand.
In a media statement released on April 23rd the Minister of Revenue Peter Dunne announced that the government will be looking at amending the GST system to allow foreign businesses to make claims for a refund for purchases they make from local businesses.
Under current regulations, foreign entities which do business in New Zealand are not able to claim GST refunds like a New Zealand company. Commenting on the rules, the Minister said that “…our GST system is a hurdle for non-resident companies looking to do business with New Zealand businesses.” He added that New Zealand was disadvantaged on the international market, as some foreign companies may choose to do business in countries with more favorable tax systems.
According to the Minister, the government is now investigating the feasibility of implementing a new GST registration system for foreign businesses, allowing international companies to receive GST refunds. The new system should be implemented by April 1 2014.
Commenting on the proposed change, the Minister suggested that “ …by removing GST as an impediment, this will help level the playing field and allow our businesses to compete for contracts internationally.”
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