Netflix is one of the services that will soon attract GST.

GST will be slapped on Netflix subscriptions, iTunes downloads, Steam games and Amazon e-books within a year.

Revenue Minister Todd McClay said consumers would have to pay GST when they bought digital products and services from overseas firms from October 1.

Netflix' Sydney-based spokesman Luke McClelland would not comment on whether the United States television company might absorb all or any of the 15 per cent charge, or would pass GST on to Kiwi consumers in full by adding it to its $12.99 to $15.99 monthly charge.

Apple, another company which will be impacted, has been approached for comment.

McClay first announced that the Government planned to impose the so-called "Netflix tax" in August.

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The move is designed to close a loophole under which digital products and services can be bought from overseas firms tax free and is expected to raise about $40 million a year for the taxman.

McClay said he had now followed through by introducing the necessary legislation to Parliament.

The move was about "fairness and equity", he said. It would put overseas firms on a level-playing field with New Zealand companies, which already had to charge GST on all services they sold New Zealanders, he said.

Spark is one of the companies that has campaigned for the change. Chief executive Simon Moutter has said it is unfair it has to charge GST on its subscription television service Lightbox, while overseas rivals such as Netflix did not.

Several countries, including South Africa, Norway and Japan, have introduced similar regimes to that proposed by the new legislation, with Australia set to follow in July 2017.

The Government is still considering whether and how to levy GST on physical purchases from overseas websites. Most physical items worth less than $400 can be imported from overseas GST-free.

McClay said that was "also of concern to the Government". Customs will release a discussion paper on that topic in April, he said.

The move to levy GST first on digital imports should be seen as part of a "two-step process", he said.

Retail NZ spokesman Greg Harford said it was disappointed physical goods would continue to cross the border without tax.

The retail association had urged the Government to consider closing the "GST loophole" on low-value physical goods at the same time as it addressed digital imports, he said. "We are disappointed that the government has not listened to this advice."

Any foreign company that sells more than $60,000 of digital services to New Zealanders each year will be required to register with Inland Revenue and collect the GST on its behalf. The Government had consulted on instead imposing a lower $10,000 annual threshold which would have impacted more foreign firms.

Deloitte tax partner Allan Bullot said it was good the Government was "being more realistic than other countries by not having a ridiculously low threshold that we are never going to enforce".

But he said the October 1 deadline would be a tight one for businesses to meet.

McClay said that if Kiwi consumers used "a virtual private network" (VPN) to make it appear they lived outside the country with goal of avoiding GST, they would be liable for a fine of up to $25,000.

But that would not apply if they were using such "anti-geo-blocking" services for the purpose of accessing content, such as television shows, that they could not access in New Zealand.

While McClay said it would be up to Inland Revenue to implement the rules, Bullot believed that would mean people would not be liable for fines if they were, for example, using VPNs to circumvent blocks on the United States version of Netflix, which is not supposed to be available in New Zealand for copyright reasons.