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New Zealand hits gig & sharing economies platforms with 15% GST 2024

Imposition on digital platforms Goods & Services Tax 1 April 2024

In a world-first, New Zealand has drafted a Bill to impose on gig & sharing economies platforms GST collections obligations. This shifts the indirect tax requirements from the accommodation and transportation service providers to the intermediate digital platforms (e.g. Uber and Airbnb) – making the platform the deemed supplier for GST puroposes.

New Zealand opened a public consultation on this topic in March this year.

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Accommodation and Transport services subject to GST

The New Zealand draft law covers:

  • Ride-sharing
  • Food and drink delivery
  • Home sharing

The Bill also includes a flat-rate credit scheme intended to reduce compliance costs for accommodation hosts and drivers (underlying suppliers) who are not required to be registered for GST.

Aside from the introduction of GST on the services, the New Zealand Taxation Bill includes provisions to introduce the OECD digital platform reporting and exchange framework from January 2024.

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, as part of its wider VAT in the Digital Age reforms.

 

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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