2016 online GST changes

By on 21st August 2015

The New Zealand Government is planning to lower the GST threshold on overseas online purchases to help save our local businesses and increase the amount of tax our country collects. This decision was made after Australia decided to lower its GST threshold, which currently has an upper limit of A$1,000, the highest in the OECD. New Zealand’s upper limit is only $400, which is still relatively high.

The Government plans to collect GST on everything that can be bought overseas online, ranging from iTunes to clothing to accounting services. This change will hopefully give our local businesses precedence over international services and products. I would’ve thought that the substantial drop in the NZD might have encouraged more local spending…but that’s another story.

Interestingly enough, there are rumors that forcing overseas companies to register for GST on online purchases may completely drive them away from even offering New Zealand their products or services.

The GST threshold change is likely to shift in 2016 with any changes to prices depending on how much of the 15 per cent tax companies like Apple, Amazon and Netflix are willing to absorb. Any plan to strengthen local business is a positive one, but let’s just hope the changes won’t jeopardize our options too severely.

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