Getting the ‘Amazon tax’ to work

While New Zealand has made the bold call it will force e-commerce juggernauts like Amazon to pay GST on products being sold to Kiwis, it was not clear how Revenue Minister Stuart Nash would compel a global giant to collect tax from customers.

But a spokeswoman for Nash said the Government had ways it could clawback GST from overseas companies. She pointed to a discussion document, put together by the National government last year, on measures to ensure foreign firms comply. It said legislation would be explored such as a “joint-registration system with other countries or data matching programmes between tax jurisdictions or government agencies”, a system which operates in the European Union.

Under the EU system, suppliers are able to register in a single member state, which is then responsible for distributing the GST returned to the other relevant member states.

The Government also had the means to require treaty partners’ tax authorities to collect GST and information on its behalf if firms do not voluntarily comply. Another way was through data matching programmes with Customs and Inland Revenue.

“Domestically, Customs’ import entry information could be matched with Inland Revenue’s list of GSTregistered businesses to determine whether suppliers who are supplying more than $60,000 of goods a year into New Zealand are registered for GST. Officials consider this can be efficiently supported by the new customs and excise legislation,” the document stated. — Aimee Shaw