Bringing you the latest GST and Customs developments

In this issue:

Australia moves to impose GST on the digital economy

The debate about the imposition of GST on digital services provided by foreign suppliers continues. Several countries are now making changes to their GST rules to ensure such services are adequately taxed and Australia is the latest to join this list.

As previously signalled and as part of the Australian Federal Budget 2015/2016, the Australian Government announced that it will change the law to ensure digital products and services provided to Australian consumers receive the same GST treatment whether they are provided by Australian or foreign suppliers. The Government also released draft legislation for consultation at the same time.

GST and crowdfunding

Crowdfunding, via websites such as Kickstarter and Pledge Me, is becoming an increasingly popular way of funding small to medium enterprises (SMEs) seeking alternative sources of capital.

These arrangements are a form of "barter" and it is well accepted that they are susceptible to being taxed under any form of GST / VAT.

GST and inbound tour operators

The case of ID Tours New Zealand Limited v Commission of IR (High Court, March 2015) highlights the importance of clearly documenting commercial relationships and that the failure to do so could result in adverse GST outcomes.

Inland Revenue took the view that ID Tours was buying the goods and services making up the tour packages and "on-selling" them for a margin. Under this approach, the sale of the tour packages is standard rated and ID Tours, in effect, pays GST on its margin at 15%.

New border clearance levy

In Budget 2015, the Government announced the introduction of a new Border Clearance Levy payable by travellers arriving in and departing from New Zealand by air or sea, with effect for travel from 1 January 2016.

Australia’s Trusted Trader Programme

The Australian Customs and Border Protection Service (ACBPS) is embarking on a new initiative known as the Trusted Trader Programme (TTP).

The TTP is designed to improve the efficiency and reduce the costs in the international supply chains of Australian importers and exporters under a so-called 'Trusted Trader' arrangement.