Retail, Innovation and Manufacturing reporter for the NZ Herald

'Netflix tax' to take effect from tomorrow

It's now going to cost you a bit extra to access Netflix shows like House of Cards. Photo / Supplied
It's now going to cost you a bit extra to access Netflix shows like House of Cards. Photo / Supplied

Consumers are going to have to fork out extra for e-books, music, movies and television online, as the so-called "Netflix tax" comes into effect from tomorrow.

Physical goods bought online already incur a GST charge, but the new tax will affect things like e-books, music and video downloads, and streaming services like Netflix.

Deloitte tax specialist Allan Bullot said the change was a good one for New Zealand and would bring it up to speed with the rest of the world.

"That's something where back in 1986 when [GST] came in, no one would have dreamed that you would be walking around with a phone in your pocket that you could download songs and movies on," Bullot said.

"If you had a walkman back then you were cool - so it's just a different world."

Under previous law, the Government was missing out on $180 million a year by not collecting GST on online purchases, including $40 million from shopping on iTunes, Netflix, Spotify and other online services.

Bullot said it was unlikely to have a major effect on everyday New Zealand consumers.

"It's a good change, and the wheels aren't going to fall off New Zealand's place in the world tomorrow when the tax comes in," Bullot said.

"It will collect some money for the government and it will be interesting to see how it goes. We won't get complete compliance from overseas companies but we will get some - and that's more than we're getting now."

Bullot said it would mostly affect larger companies because the threshold was $60,000.

He said this meant micro-suppliers of remote services wouldn't be caught up but a small number of larger players would be forced to register to charge GST to New Zealand consumers.

The introduction of the Netflix tax coincides with the 30 year anniversary of GST tax in New Zealand which is also tomorrow.

- NZ Herald

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