Kiwi users to face VPN dilemma
Like its neighbouring country Australia, people in New Zealand are excessively using VPN (Virtual Private Network) as they have a knack to access extra content from services like Netflix. The Netflix catalogue of US covers broad range of content than many other countries that include New Zealand. It is common among Kiwis to subscribe to New Zealand Netflix site and ensure use of VPN service in order to access US Netflix.
It’s all about the tax dollars!
As the world is shrinking due to increased communication, the governments worldwide are trying to manage tax money. Contemporary times have tuned many of us to get entertained online and make use of various digitally managed services. So it’s not a new thing to buy intangible products and services from based abroad product/service providers.
Digitally operated purchases have become so widespread that governments are launching methods and channels to tax such foreign purchases on home shores. The beginning of January observed that EU inflicted new restrictions on sellers based outside EU in order to gather sales tax known as VAT (Value added tax) per sale that has to be handed over to the relevant EU member state irrespective of where the seller is currently based. New Zealand is all set to follow suit by requiring sellers selling over a certain threshold limit to pay sales tax normally know as GST (General Sales Tax).
The reports about New Zealand notify that customers in New Zealand making use of technologies such as VPN services and pretend that they are in another jurisdiction so that they can avoid GST could be fined up to NZ $25,000.
VPN or not to VPN?
However, there is a significant twist in the story, those who use a VPN to access services not available in New Zealand such as the wider movie catalogue of US Netflix would not fall under penalty net and are more likely to be allowed to carry on such geo-bypassing.
The question arises that how the New Zealand government aims to determine who is evading local taxes and who is bypassing constraints to access content not available. Kiwi website Stuff.co.nz states that what is accessing might suggest the solution. For instance, if the user has accessed content that was already available on the New Zealand service via the US service then this can be taken as a case of tax evasion. However, if the case is opposite in the sense that content wasn’t available on the NZ service then this can be taken as legitimized geo-bypassing.
Beside all this, one crucial question still remains for the New Zealand government. As VPN services completely encrypt your communications and VPN providers such as LimeVPN store no logs it will be close to impracticable to assess the user’s real location unless the user particularly signs up with his physical information. Everyone can watch US UK Natflix with VPN. But even then it would require a company specifically not New Zealand based like US Netflix to gig out this information for the government. While exploring new methods to recover tax revenue that is lost to overseas sales it seems that the technological challenges in the implementation of such systems will continue to trouble governments.