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New Zealand consults on gig and sharing economy platforms and GST

The role of digital platforms in the taxation of the gig and sharing economy

New Zealand has launched a consultation on taxing gig and sharing economies.  Get our global VAT and GST free news emails, sign-up here.

Options to tax the new digital platforms and economies

The consultation will consult until April 2022 generally on matters relating to New Zealand’s tax settings applicable to the gig and sharing economy. It considers options that the Government is considering that have the objectives of minimising compliance costs for digital platforms, improving fairness for traditional sellers, enhancing tax compliance generally, and making life easier for sellers entering the sector who may not be familiar with business tax obligations.

This will include:

  • Whether to levy Goods and Services Tax
  • Opting the OECD rules (see below) vs a home-made low-cost version
  • Options to apply continuing tax education over mandatory measures
  • How to use the GST threshold
  • Extension of marketplace rules – deemed supplier
  • What platform supplies should be subject to GST
  • The role of digital platforms
  • GST returns and filing
  • The option to recover GST incurred
  • Introducing a flat-rate scheme, with lowered rate by no right to deduct
  • The impact of GST on marketplaces
  • Facilitation services
  • GST on sellers costs

Global VAT / GST reviews of gig and sharing economies

Australia is implementing its gig & sharing marketplace reporting program in July 2022. This follows similar requirements in Europe, including the EU’s DAC 7 marketplace legislation for 2023. The EU is also reviewing VAT treatment for the platform economy, which includes the gig and sharing economies

The OECD has performed extensive work on VAT issues for the gig and sharing economies. The EU’s focus should be broader, although the OECD has now extended to goods and ride sharing.

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