Last updated on May 20th, 2020 -
New Zealand’s GST law
As of December 1st, 2019, New Zealand enacted a recent law on GST remittance that may or may not affect businesses from countries that sell to New Zealand. This recent law is quite similar to the low-value goods Australian law that went into effect in 2018.
Let’s get you up to speed on the important details of what’s going on with New Zealand. Here’s what we’ll be covering after the jump:
- What does New Zealand’s GST law mean?
- Who is impacted?
- Actions needed, if any
- How Zonos can help
What does New Zealand’s GST law mean?
With this GST law, New Zealand is essentially following in the footsteps of Australia. In 2018, Australia enacted a GST (Goods and Services Tax) law that affects overseas retailers and so far, has seen a high level of compliance. Now, New Zealand has come up with their own version.
New Zealand’s GST law is applicable to any overseas businesses, marketplace operators, or redeliverers that will or are likely to supply more than NZ$60,000 total in low-value goods and services (< NZ$1,000) directly to New Zealand customers within a 12-month period. These impacted businesses are required to collect and remit GST directly to New Zealand.
For those unfamiliar with GST, this is a consumption tax that New Zealand applies to most goods imported into its country.
Who is impacted?
To determine if you are or will be over the NZ$60,000 threshold, consider the following:
- Any low-value goods each valued below NZ$1,000 and sold directly to New Zealand consumers
- Online services and digital products sold directly to New Zealand consumers
- Amounts paid by New Zealand consumers for services such as delivery, insurance, etc.
*Just make sure you are not including any supplies sold to New Zealand businesses or goods that are individually valued over NZ$1,000.
Actions needed, if any
If you are not over the NZ$60,000 threshold and won’t be crossing this in the 12-month period, there’s nothing you will need to do!
For those that are over the threshold, read on for steps on what to do and pat yourself on the back that you’ve got so many amazing customers in New Zealand!
Step 1 – Register for New Zealand GST.
The person responsible for filing GST returns must be the one to register. This can be completed online. After registration, you will need to call New Zealand Inland Revenue at +64 4 890 3056 to activate your account. Once activated, you will get an email to set up an account password that must be completed within 30 minutes.
Step 2 – Collect GST on all orders.
GST is 15% and applied to the product value, shipping, and insurance costs.
There are two options for GST collection:
- Option 1 – Collect GST for low-value goods only and allow GST for high-value goods to be collected at the border. This first option is a lot more complicated and messy to deal with, but if you feel this option works best for you, the New Zealand website provides some helpful information. They have also created a helpful video that answers many questions and scenarios regarding mixed shipments.
- Option 2 – Collect GST on all goods (both high and low-value). This method is much more straightforward and easier to manage. Simply apply 15% to the selling price of the goods plus any shipping, insurance, and service costs.
Step 3 – Update shipping documentation.
Make sure you have additional documentation supplied with the shipment. Customs officials will need to clearly identify which items GST has already been collected on. You can supply this information in the comments section of the commercial invoice and/or by supplying a copy of the customer receipt with details that GST has already been collected.
Step 4 – Supply a customer receipt/tax invoice.
Notify customers of the GST with an appropriate receipt that includes the supplier’s name/GST registration number, date of supply (and if different, date the receipt is issued), description of the goods, price paid for the goods with the amount of GST included (can be expressed in a foreign currency), and an indication of which goods have had GST charged.
Step 5 – Refund GST on sales to New Zealand businesses.
If you choose to collect GST on all orders, New Zealand businesses can use the receipt/tax invoice you supplied to them in order to claim a GST deduction on their GST return for orders valued less than NZ$1,000. For orders over NZ$1,000, you will be required to issue a refund of GST to New Zealand businesses.
Step 6 – Remit GST quarterly.
You can do this electronically via New Zealand’s Inland Revenue website. This law required that GST funds be remitted to New Zealand on a quarterly basis. The only exception to this is for the first period (December 1st, 2019 through March 31st, 2020) in which the initial deadline is May 7th, 2020. All others will be the 28th of the month following the end of the quarter.
How Zonos can help?
We’re ready and happy to provide assistance in managing this New Zealand GST law and any similar law (e.g. Australia’s GST taxation) that may go into effect. These laws may sound overwhelming, but may actually result in more orders falling under New Zealand’s de minimis values. This translates into an increase in duty and tax-free shipments for Kiwi customers, meaning even more sales for you!
Here’s how Zonos can help tackle this New Zealand GST law:
- Zonos Hello can help inform Kiwi customers when they won’t pay any duties or taxes.
- We can register for New Zealand GST on your behalf.
- We can update your account to collect GST on all orders.
- If you process your shipment through Zonos Dashboard, our system can handle the appropriate GST customs notifications for you.
- Zonos also has the ability to send a compliant receipt/tax invoice on your behalf as well as filter and approve all of your GST refund requests.
Feel free to contact us, or check out the links below for further reading.
- New Zealand import taxes – Read more detailed information on this recent law.
- New Zealand GST remittance – Learn how Zonos has prepared to manage this.
- Import taxes overview video – Watch a video about overseas businesses looking to import into New Zealand.
- Q&A for overseas businesses – Get questions answered directly from the source, Inland Revenue.
- Converting your currency to NZD – Review currency conversion instructions on GST registration.
- Tax laws on low-value goods – Learn about how Australia and New Zealand are changing the tax game.
- Blog: What is de minimis value? – Get more context and examples on our blog post about de minimis.