Law Commons^™

Data First – Tax Next: How Fiji’S Technology Can Improve New Zealand’S ‘Netflix Tax’ (Part 4), Richard Thompson Ainsworth

Faculty Scholarship

This is the fourth paper examining the recent amendments to the New Zealand Goods and Services Tax (GST); amendments that are collectively known as the Netflix Tax. These papers assess the effectiveness of the Netflix provisions, and how they could be enhanced if New Zealand adopted the technology and vision of Fiji’s VAT Monitoring System (VMS). The Netflix provisions were effective, July 1, 2017.

This final paper considers:

(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 intends to respond to resident consumers who …

Data First – Tax Next: How Fiji’S Technology Can Improve New Zealand’S 'Netflix Tax' (Electronic Marketplaces) Part 3, Richard Thompson Ainsworth, Chang Che

Faculty Scholarship

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 …

Data First – Tax Next: How Fiji’S Technology Can Improve New Zealand’S 'Netflix Tax' (Part 2), Richard Thompson Ainsworth

Faculty Scholarship

This is the second in a four-part series addressing VAT/GST avoidance schemes involving remote sales of services. These schemes have been growing in importance. The IMF reports that the services component of cross-border trade has been on the rise for fifty-years or more, making the Internet a serious threat to revenue. Technology has accelerated tax avoidance.

Statutory draftsmen in New Zealand have looked at this problem directly with what has been called the Netflix Tax. Technologist in Fiji have been struggling with similar problems and have developed technology-based security systems that would seem to address remote sales of services more …

Dice – Digital Invoice Customs Exchange, Richard Thompson Ainsworth, Goran Todorov

Faculty Scholarship

A digital invoice customs exchange (DICE) is a technology-intensive tax compliance regimen for VAT/GST that utilizes invoice encryption to safeguard transactional data exchanged between seller and buyer in both domestic and import/export contexts while simultaneously notifying concerned jurisdictions of the transaction details.

DICE facilitates real-time VAT/GST enforcement as well as real-time commercial contract verification. It is a commercial invoice validation system that prevents tax evasion, most notably missing trader fraud and the non-declared import of trade-able services. DICE mimics the most effective administrative enforcement effort ever undertaken by the US IRS – the requirement to disclose the social security numbers …

Vat -- East African Community: The Tradable Services Problem World-Class Solution, Richard Thompson Ainsworth, Goran Todorov

Faculty Scholarship

The value added taxes (VATs) of the East African Community (EAC) are open to manipulation and are leaking revenue from tradable services transactions. The EAC’s response has been to adopt a unique Reverse VAT mechanism. Something more is needed – a Digital Invoice Customs Exchange. Together these adjustments will provide a world-class solution to a world-wide problem. The EAC appears to be moving in this direction.

The vulnerability of the EAC VATs to tradable services is not surprising. The EAC borrowed VAT designs from the major VAT models, the EU VAT and the New Zealand Goods and Services Tax (NZ …

Zappers: Tax Fraud, Technology And Terrorist Funding, Richard Thompson Ainsworth

Faculty Scholarship

"Zappers," or automated sales suppression devices, have brought unheard of efficiencies and economies of scale to a very simple tax fraud - skimming cash sales at point of sale (POS) terminals (electronic cash registers). Until recently the largest tax fraud case in Connecticut, also the "largest computer driven tax-evasion case in the nation," was a zapper case. Stew Leonard's Dairy in Norwalk Connecticut skimmed $17 million in receipts and hid the cash in St. Martin (a Caribbean island). Talal Chahine and his wife, Elfat El Aouar, owners of the La Shish restaurant chain in Detroit Michigan have the dubious honor …