New Zealand: Adopted Taxation Bill 164-1 (No 2) introducing taxation measures for digital platform operators

On 28 March 2023, the Taxation (Annual Rates for 2022–23, Platform Economy, and Remedial Matters) Bill (No 2) was adopted by the New Zealand Parliament. The Bill introduced several changes, including the proposal and subsequent removal of GST on KiwiSaver manager fees, which caused a public outcry. While the annual tax rates remain unchanged, the bill also clarifies and expands the qualifying criteria for non-active trusts, allowing them to have higher administration fees and income thresholds. New measures for foreign trusts require compliance with foreign trust disclosure rules and give the Inland Revenue more power in deregistration. Additionally, the Bill includes a GST exemption for employer-subsidized public transport and addresses several technical issues, such as rules for depreciation and changes to the business continuity test. Significant changes also target the "Platform Economy," extending GST marketplace rules to accommodation and ride-sharing services and requiring digital platforms to report detailed seller data to Inland Revenue. These changes are expected to impact various businesses, requiring them to adapt their systems for compliance. A change is that online marketplace operators must now collect GST at a 15% rate on services performed, provided, or received in New Zealand, with 6.5% going to the government and 8.5% to the operators. Large accommodation hosts meeting certain thresholds can opt out of these rules, maintaining their GST obligations independently through written agreements. The Bill also expands criteria for non-active trusts, introduces stricter compliance for foreign trusts, provides a GST exemption for employer-subsidized public transport, and addresses technical tax issues, including depreciation and business continuity. These changes impact a range of businesses, requiring system updates for compliance.