GST putting New Zealand at a competitive disadvantage
Speaking at Meetings 2018 in Auckland, CINZ chief executive Sue Sullivan said discussions with Inland Revenue are ongoing.
Currently GST must be charged at 15 per cent on registration fees for conferences held in New Zealand, regardless of whether the conference attendees are residents or non-residents. This is putting New Zealand conferences at a GST disadvantage compared to Australia in particular, says Sullivan.
“This will have wider economic consequences for ‘NZ Inc’ too, if New Zealand cannot provide a workable and straightforward scheme for GST refunds to overseas businesses attending conferences in New Zealand,” she said.
“New Zealand needs to be competitive on the world stage. Australia now has an edge on us in a number of ways including zero-rated GST for International Delegates since October 2016, State Bureaux funding in various forms for conference bid support, and the recent Federal Government announcement of a $12 million Bid Fund Program over three years, one of most important recently announced developments.
“Australia’s Bid Fund Program will offer financial support at the crucial bidding stage for international corporate incentive trips, exhibitions, association conferences and congresses. We need to be looking at ways New Zealand can keep up and compete.”
Allan Bullot, tax partner with Deloitte, has been liaising with Inland Revenue on behalf of CINZ to look at a proposed solution to the GST disadvantage New Zealand faces.
“In 2014 changes were made to the New Zealand GST legislation that allowed non-resident businesses without New Zealand operations to claim back GST on costs incurred within New Zealand, bringing us in line with various international guidelines for the treatment of business related costs,” Bullot said.
“While opportunities exist for non-resident businesses sending staff to New Zealand to attend conferences to technically claim GST refunds, in practice it is difficult, if not impossible, to economically recover the GST on New Zealand conference costs. The 2014 GST legislative changes have in practice not been effective for the New Zealand conference industry and the GST problem has remained.
“Amending the New Zealand GST legislation to allow zero-rating of certain services made in relation to conferences would be a solution similar to the Australian approach.”