Data First – Tax Next: How Fiji’s Technology Can Improve New Zealand’s 'Netflix Tax' (Electronic Marketplaces) Part 3

95 Tax Notes International 1249, 2019

35 Pages Posted: 16 May 2020

See all articles by Richard Thompson Ainsworth

Richard Thompson Ainsworth

NYU - Graduate Tax Program; Boston University - School of Law

Chang Che

affiliation not provided to SSRN

Date Written: 2019


This is the third paper examining the recent amendments to the New Zealand Goods and Services Tax (GST) that are commonly known as the Netflix Tax. A fourth paper will follow.

The importance and complexity of dealing with electronic marketplaces has made an independent paper on electronic marketplaces necessary. Taken together this set of four papers assess the effectiveness of the Netflix provisions, and how they can be enhanced by adopting the technology and vision of Fiji’s VAT Monitoring System (VMS). The Netflix provisions were effective, July 1, 2017.

This paper considers rules that allocate the responsibility for collecting, reporting and remitting GST between:

(a) the digital platforms in one instance, and

(b) the remote (third-party) service providers that use digital intermediaries to sell into New Zealand in the other instance.

The fourth paper will consider the three remaining issues:

(a) the treatment of domestic agents when they are used by remote service providers to facilitate sales to New Zealand customers;

(b) how New Zealand responds to resident consumers who supply false information to remote service providers so that the service provider will zero-rate a transaction, thereby defeating the GST; and

(c) the treatment of dual status taxpayers, New Zealand residents whose status allows them to enter into contracts with remote service providers either as individual consumers or as business taxpayers.

As before, the primary contrast is the difference between New Zealand’s traditional (statute and regulation) approach to VAT reform, and the technology-intensive approach of Fiji. Both jurisdictions are struggling to deal with the modern economy, but they approach this challenge very differently. These papers come down on the side of Fiji and technology. In the end it observes that what Fiji understands is that code, computer code, is very effective and cost-efficient regulation. There is something important to learn about the way that Fiji utilizes “code” (computer code) in its tax reform.

Keywords: Value Added Tax, VAT, Goods and Services Tax, GST, Pacific Island Countries, PICs, B2C Reverse Charge, Proof of Audit, Blockchain Information Exchange, Netflix Tax, Amazon Tax, Fiji, VAT Monitoring System, VMS, New Zealand, IMF, Digital Invoice

Suggested Citation

Ainsworth, Richard Thompson and Che, Chang, Data First – Tax Next: How Fiji’s Technology Can Improve New Zealand’s 'Netflix Tax' (Electronic Marketplaces) Part 3 (2019). 95 Tax Notes International 1249, 2019, Available at SSRN:

Richard Thompson Ainsworth (Contact Author)

NYU - Graduate Tax Program ( email )

Bobst Library, E-resource Acquisitions
20 Cooper Square 3rd Floor
New York, NY 10003-711
United States

Boston University - School of Law ( email )

765 Commonwealth Avenue
Boston, MA 02215
United States

Chang Che

affiliation not provided to SSRN

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