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December 5, 2019 / 0 min read - Last updated: October 21, 2022
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:
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.
To determine if you are or will be over the NZ$60,000 threshold, consider the following:
*Just make sure you are not including any supplies sold to New Zealand businesses or goods that are individually valued over NZ$1,000.
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!
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.
GST is 15% and is applied to the product value, shipping, and insurance costs. There are two options for GST collection:
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.
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.
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.
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.
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:
Feel free to contact us, or check out the links below for further reading.
Christina Trocco is proud to help build first-class documentation and content at Zonos, the leading landed cost calculation software for cross-border ecommerce. She is a writer at heart with over 10 years of content writing experience in a variety of industries. At Zonos, she whole-heartedly believes in Zonos' company vision in breaking down the complexities of international trade to make cross-border accessible to everyone.