WELLINGTON: Sparks are flying after Netflix said it would not charge GST on the New Zealand version of its online television service which launches next Thursday.
Andrew Pirie, spokesman for Spark, which owns rival internet television service Lightbox, said it was “yet another example of the lack of a level-playing field in this rapidly changing digital world”.
“Lightbox has been set up as a New Zealand-based company, working under New Zealand rules and paying New Zealand tax and we think other companies should be doing the same,” he said.
The argument over whether GST should be charged on digital imports, such as online television, music and games services that are hosted overseas, flared up last week when Revenue Minister Todd McClay instructed officials to look at the steps other countries were starting to take to collect such taxes.
The tax status of Netflix’ local service versus Lightbox and Sky’s Neon service looks set to highlight what is at stake.
United States-based Netflix, Sky Television and Spark are locked in a bidding battle to secure the best programmes for their streaming televisions services and to win over consumers in what is expected to become a fiercely competitive market.
But Netflix will have a 15 per cent cost-advantage over Lightbox and Neon because it will not have to charge viewers GST.
A company spokesman said Netflix would not collect GST in either New Zealand or Australia, where it is also launching a local service, as it was “not a local entity”.
