New Zealand low-value taxLearn how to manage New Zealand GST.
The New Zealand law, intended to target the taxation of imported goods, has been in effect since December 1st, 2019. This new law is very similar to the low-value goods law that Australia enacted in 2018.
Learn whether you're impacted, and if so, what you need to do, and how Zonos can help you.
This new law impacts your business processes if you supply (or are likely to supply) more than 60,000 NZD in low-value goods and services directly to New Zealand consumers in a 12-month period.
Where possible, Zonos will notify customers that are close to this 60,000 NZD threshold, but you're also welcome to verify your sales to New Zealand consumers.
You should consider the following to determine if you're over the 60,000 NZD threshold.
- Low-value goods valued below 1,000 NZD each 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.
Note: When determining if you meet the threshold, do not include supplies sold to New Zealand businesses or goods each valued over 1,000 NZD.
If you're below the 60,000 NZD threshold
There are rules for duty and tax calculations for orders into New Zealand, but Zonos handles it. In fact, this law may result in more duty and tax-free shipments for your New Zealand customers, which should translate into more sales for you.
Zonos Hello can help inform New Zealand customers when they will not have to pay any duties or taxes. This may help you increase sales.
If you're over the 60,000 NZD threshold
Zonos manages the non-resident country taxation for Landed Cost Guarantee customers by doing the following:
- Registering tax numbers/IDs for you
- Keeping track of thresholds for each country and collecting taxes at the appropriate time, so you won't over or under collect
- Remitting quarterly taxes for you to each government entity
Now that you have an overview of how Zonos can help, here is a specific breakdown of how we are here to assist you so you'll be ready for this new law.
Register for New Zealand GST
Collect GST on all orders
Similar to Australia, you will now be required to collect GST (New Zealand's sales tax) on all your New Zealand orders. A simple update to your Zonos account will handle this. Reach out to Zonos for more details.
Update shipping documentation
You'll need to let New Zealand customs know that you have already collected GST on your order. The simplest way to handle this is to process your shipment through Zonos Dashboard and have our system handle the appropriate notifications for you.
If shipping through your software, you can include a statement in the comments section of the commercial invoice that includes an explanation along with your GST number. An example statement might read: "GST has been collected at the point of sale for all items in this consignment and will be remitted via GST number 123456789."
Supply a customer receipt/tax invoice
As part of the new law, you must supply a receipt to your New Zealand customers that notifies them of the GST that applies to their order. Zonos offers a service to send a compliant receipt/tax invoice on your behalf. Reach out to Zonos for details on enabling this service.
If you elect to handle the receipt/tax invoice on your own, then you can take a deeper dive into the requirements by viewing our in-depth New Zealand taxation guide along with our sample receipt/tax invoice.
Refund GST on sales to New Zealand businesses
You are technically not required to collect GST on goods purchased by a New Zealand business for business use. For most Zonos customers, it's not feasible or practical to make this kind of determination at checkout. Zonos recommends collecting GST on all orders, then a New Zealand business can use the receipt/tax invoice that you supplied them to claim a GST deduction on their GST return for orders valued less than 1,000 NZD.
For orders over 1,000 NZD, you will be required to issue a refund of GST to the New Zealand business. You may also choose to refund lower value orders as a courtesy to your customers.
Remit GST quarterly
The GST you collect from New Zealand consumers must be remitted quarterly to New Zealand Inland Revenue. Contact Zonos for more information on having Zonos handle this process for you. You may also view our in-depth New Zealand taxation guide for more information on how to handle this process yourself.
New Zealand charges a 1.42% credit card fee to remit payment unless you have a New Zealand or Australian bank account, so we have built this credit card fee into our calculation. The fee is only calculated off of the GST on the order and will be included in the total GST amount. Because of this the 15% GST looks more like 15.213% in the calculation.
Whether you decide to use Zonos' services to help your company manage this law or manage it on your own, it is important that you are compliant as there will likely be consequences for noncompliance. Our New Zealand taxation guide has details on how New Zealand will act on those who aren't compliant with this law.
This article on New Zealand GST remittance is intended for merchants selling primarily to New Zealand consumers and do not sell alcohol or tobacco into New Zealand.
Contact us if you need to discuss a more advanced setup for your store.
How do I best inform my New Zealand customers about the change?
Zonos Hello will automatically inform all New Zealanders (or “Kiwis”) of the change when they arrive at your website and let them know they will be required to pay GST at the time of their order.