New Zealand introduced a Goods and Services Tax (‘GST’) on 1 October 1986. This is similar to VAT, and based on the OECD’s standard indirect tax regime model. It is one of the most progressive regimes in the world, with a wide base and limited exemptions. If you regularly sell goods or services you might need to charge GST to your customers. © 2024 KPMG LLP, a Delaware limited liability partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee.
Travellers arriving on airlines or private craft are charged a Customs levy of NZ$16.59 and a biosecurity levy of NZ$16.92. The IVL is said to be “a way for travellers to contribute directly to the tourism infrastructure they use and to help https://www.online-accounting.net/ protect and enhance the natural environment”. You must request and pay for an NZeTA before you travel to New Zealand. There are two ways of paying for the NZeTA and IVL, either through an Immigration New Zealand app or their website.
- The lone exception to this is the first period, which is a length of four months (December 1st, 2019 to March 31st, 2020).
- This measure would take effect in New Zealand from the 2024 calendar year, with the first information reporting obligations (and exchange) occurring in early 2025.
- You must request and pay for an NZeTA before you travel to New Zealand.
- Whatever method you use to collect GST, make sure you store the data appropriately so you remit the proper amount of GST to New Zealand.
GST was introduced in conjunction with compensating changes to personal income tax rates and removal of many excise taxes on imported goods. New Zealand also has agreements with some foreign tax authorities allowing them to collect unpaid GST on New Zealand’s behalf. Inland Revenue and Customs will also share information and work together to help identify instances of non-compliance. Registration for New Zealand GST is a simple process that can be completed online. The registration must be completed by the person who will be responsible for filing the GST returns.
The Goods and Services Tax (GST) in New Zealand
If you’ve registered for GST, there are a couple of options for how you can determine the amount of GST to collect at checkout. GST is 15% and applied to the product value, shipping, and insurance costs. [6] The key exemptions are supplies of residential accommodation and business-to-consumer supplies of financial services. 2.13 There are a number of reasons why New Zealand consumers might purchase goods online from offshore businesses, however, the tax treatment should not be a factor in consumers’ purchasing decisions.
Note 4 at the end of this version provides a list of the amendments included in it. The lone exception to this is the first period, which is a length of four months (December 1st, 2019 to March 31st, 2020). You will have until the 28th of the month following the end of the quarter to remit GST except for Q1, which has a deadline of May 7th. Payment of GST can be handled electronically through the New Zealand Inland Revenue website.
“Councils’ share ofoverall tax revenue has remained at 2% of GDP for the last50 years, despite our ever-increasing responsibilities,”says LGNZ’s President Sam Broughton. This process would be messy and prone to problems for most merchants, https://www.quick-bookkeeping.net/ but if you feel this method is best for your business, then the New Zealand website provides more information. They have also created a helpful video that walks through many questions and scenarios regarding mixed shipments.
Taxable Supply Information (“TSI”)
He has now spent over a decade in the New Zealand tourism industry, clocking in more than 600 activities across the country. He is passionate about sharing those experiences and advice on NZ Pocket Guide and its YouTube channel. Robin is also the co-founder of several other South Pacific travel guides. Plus, for more information on work taxes, check out our guide to the New Zealand Work Tax System. Travellers departing on airlines or private craft are charged a Customs levy of NZ$4.52.
GST is a consumption tax that New Zealand applies to most goods imported into its country. On 1 October 2016, the taxation of digital (‘remote’) services supplied by offshore companies (non-New Zealand) to consumers based in New Zealand changed. If you provide a listed service such as ride-sharing and ride-hailing, food and beverage delivery, or short-stay and visitor accommodation there are changes from 1 April 2024.
Find the return you need to file
When determining if you meet the threshold, do not include supplies sold to New Zealand businesses or goods that are each valued over 1,000 NZD. New Zealand has passed new legislation that impacts overseas businesses selling goods directly to New Zealand consumers. This new law went into effect on December 1st, https://www.kelleysbookkeeping.com/ 2019, and is very similar to the low-value goods law enacted by Australia in 2018. 2.9 Given the nature of the current methods of collecting GST on imported goods, the growing volume of imported goods has meant the cost of collecting GST on these goods, and the GST revenue foregone, have both increased.
Key Features of New Platform Rules
That new piece of GST legislation mirrors similar rules governing the supply of digital services introduced in the European Union (EU) in January 2015 on the taxation of digital goods. S&P GlobalRatings said last week that local government rates had notincreased, as a percentage of the economy, in the past 100years. Compare that with central government taxation whichhas gone up 200% in the sameperiod. You can choose to issue a single document that qualifies as both a receipt and a full tax invoice as long as the document fulfills the requirement for both. This can simplify business processes and may be the preferred option for many businesses. If you choose to only collect GST on low-value goods, then the information must be itemized so the customs officials know to collect GST on high-value goods at the border.
If you’re a non-resident business that sells low value goods such as clothing, cosmetics and electronic items to consumers in New Zealand, you may need to register for, collect and return GST. If you’re a non-resident and carry on any activity such as a business which involves supplying goods or services in New Zealand over NZ$60,000 a year, you may be required to register for GST. The New Zealand changes come at a time of growing obligations such as DAC7 being placed on platforms globally, emerging information reporting in other countries, and, for some platforms, the impact of payment processing reporting. In relation to VAT/GST, it is vital for regulators to ensure that there is global consistency with any VAT/GST rules relating to the gig and sharing economy. A new bill proposes significant changes to the goods and services tax treatment of the gig and sharing economy in New Zealand.
For most merchants, this will actually result in an increased number of shipments that will clear duty and tax-free. 2.12 The current policy settings place domestic suppliers of goods at a competitive disadvantage compared with offshore suppliers that are able to transport low-value goods directly to their customers without the imposition of GST. This is having the greatest impact on domestic sellers that provide goods that are similar to goods sold from offshore (or substitutable products). SCI is essentially a list of information you are required to provide to a GST registered customer to correct an error in the TSI. You can use SCI to correct many errors, such as an incorrect description of the supply, an incorrect amount charged, or an incorrect GST rate and a cancellation of the supply. There is no specific time requirement to issue SCI, but you will need to issue and keep SCI to support any GST claims on the SCI.
Since the duty on the clothing is only $26.50 (comprising tariff duty of $10 ($100 x 10%) and $16.50 of GST ($110 x 15%), Melissa’s purchase is below the current de minimis threshold. She is not required to pay any duties to Customs on the active wear she purchases from offshore. Most GST registered businesses should be able to continue issuing their tax invoices and GST credit notes without making any changes to their systems. The new rules would allow a wider range of invoicing practices to be adopted (e.g., e-invoicing systems).