New Zealand residents do not have to pay the local 15% GST on digital purchases, such as e-books. This might change as Prime Minister John Key announced that his government is looking into forcing overseas companies selling online content to pay the GST.
The primary reason why this is becoming a big issue is because recently Netflix announced it would not be charging tax because it was not a local entity. This is a blow to the rival Kiwi streaming service Lightbox that is forced to pay tax, therefore charge more money.
The NZ government is looking into the viability of starting an online service that will force publishers to apply for a GST account and make quarterly payments, based on the content that is sold. How this might affect companies that sell content in apps, such as digital newspapers, magazines and music remains to be seen.
Michael Kozlowski is the Editor in Chief of Good e-Reader. He has been writing about audiobooks and e-readers for the past ten years. His articles have been picked up by major and local news sources and websites such as the CBC, CNET, Engadget, Huffington Post and the New York Times.