GST rules for non–resident retailers selling low value goods to New Zealand consumers
If you are currently selling goods online to New Zealand based consumers or intending to do so, then this policy change from the New Zealand Government might be relevant to your business.
From December 01st 2019, non-resident businesses will need to start charging standard 15% GST on taxable low value goods they import and supply to New Zealand end customers.
Until this new requirement is effective, GST would be collected at the New Zealand border by consumers except for items valued at a total GST and duty less than NZ$60. This meant that no GST would be collected at all on low valued items sold by overseas retailers.
Hence this new legislation is creating a level playing field for local New Zealand businesses.
How does the government define low value goods?
According to Inland Revenue, the New Zealand tax office, low value imported goods are physical goods with a value of NZ$1,000 or less, excluding GST.
These include books, clothing, shoes, cosmetics, sporting equipment and electronic items.
Who will be required to comply with this new requirement?
Overseas merchants selling directly to NZ consumers, electronic marketplace facilitating these sales, and any redelivering companies, offering personal shopping and delivery services of offshore items otherwise unavailable to New Zealand consumers, may need to register for and charge GST.
The above-listed mentioned stakeholders will be required to comply with this new measure as soon as their total supplies of goods and services exceed the NZ$60,000 threshold or, if they expect they will breach it in the next 12 months.
For supplies above NZ$1,000, the current GST rules will continue to apply, meaning that instead of being charged GST by the supplier, consumers will need to pay the GST -and if applicable duty- when collecting their purchased goods at the New Zealand Customs.
If you think you might be affected by this change, contact us and we can help you identify your GST registration requirements.
This is a post by Louise Boussemart, VAT Researcher at SimplyVAT.com