You are using an older browser version. Please use a supported version for the best MSN experience.

Online GST bill passed by parliament

NZ NewswireNZ Newswire 10/05/2016
Your online purchases are set to be taxed. © Getty Your online purchases are set to be taxed.

The bill that imposes GST on overseas online purchases of "intangibles" such as e-books, music, videos and software has been passed by parliament.

The move is designed to create a level playing field for New Zealand businesses.

Online purchases of "intangibles" inside New Zealand carry GST, but overseas purchases don't.

"Collecting GST from the growing volume of online sales across borders has been an issue of growing concern for some time," Revenue Minister Michael Woodhouse said.

"Currently New Zealand providers are at an unfair disadvantage because they must apply GST to their services, whereas overseas providers do not."

The measure comes into force on October 1 this year.

The omnibus bill also puts a withholding tax on profits earned by foreign property speculators.

The property speculators measure is the third part of the government's investment tax reforms announced in last year's budget.

Under the reforms, income tax will be charged on profits made from residential properties bought and sold within two years.

The withholding tax ensures foreign speculators have to pay it, and the measure is intended to help take the heat out of the Auckland housing market.

It comes into force on July 1 this year.

Another section of the bill is intended to help the Inland Revenue Department maintain contact with student loan borrowers living in Australia.

"Most student loan borrowers do the right thing and repay their loans but those living overseas have a lower rate of compliance," Mr Woodhouse said.

"This bill allows current contact information on student loan borrowers living in Australia to be shared between IRD and the Australian tax office."

The bill passed its third reading, its final stage, by 109 votes to 12 on Tuesday.

Only NZ first opposed it.

image beaconimage beaconimage beacon