New Zealand levies GST on foreign digital services 2016

Thu 19th Nov 2015

New Zealand is to bring non-resident providers of B2C digital services into the 15% Goods and Services Tax (GST) net from 1 October 2016.

E-services included within the new tax includes: downloads of music, video and games; the online purchase of software; e-books and subscriptions to membership sites etc.

Foreign providers of digital services will be required to register with the New Zealand Inland Revenue, and complete quarterly GST filings online. GST registered providers will have to provide VAT invoices to their customers.

The reverse charge on B2B transactions will be applied, meaning there is no requirement charge GST on any such transactions.

Global VAT on digital services

Australia is planning to include foreign e-service providers within its 10% GST net from 1 July 2017. The European Union has done so for many years, and changed the VAT rate rules in 2015 to charging where the customer is based as part of the MOSS VAT reform. South Korea, Japan and South Africa also require foreign digital services providers to levy their consumptions taxes.