IRD Releases “Netflix Tax” Report

May 18, 2016 New Zealand Taxation

The IRD has released its rules for the upcoming GST rules, showing how suppliers must determine whether customers are from New Zealand or not.

On May 17th the Inland Revenue Department issued a Special Report on the upcoming rules regarding GST charges on remote and online services provided by non-resident businesses.

From October 1st any offshore business providing remote services to New Zealand tax resident will need to collect and pay GST, if the cumulative amount provided to New Zealanders over the course of the year is expected to exceed NZD 60 000.

The New GST rules have come to be known as the “Netflix Tax”, named after the popular online media streaming service.

The suppliers will be required to take ascertain whether the clients are from New Zealand, and may be required to collect information such as billing addresses, IP addresses, mobile country codes, and landline numbers.

Suppliers will be able to apply for GST registration from August 1st 2016, with the registration to take effect from October 1st.

It was also noted that under certain conditions, online market operators, such as Google Play or Steam, may also be required to register for GST in New Zealand, even though the goods provided are supplied by another third-party.

Photo By: ozcast