New GST rules for low-value imported goods
From 1 December 2019 overseas businesses selling low-value goods to consumers in New Zealand must charge GST at the point of sale if they meet the GST registration requirements, including a NZ$60,000 turnover threshold.
Low-value goods are physical goods valued at NZ$1,000 or less (excluding GST), such as books, clothing, cosmetics, shoes, sporting equipment and electronic items. Goods sold for more than NZ$1,000 will continue to be taxed by Customs at the border as they come into New Zealand.
These changes apply to:
- merchants (or retailers) who sell goods directly to New Zealand consumers (either online, by mail order or phone)
- online marketplaces merchants sell goods and services through
- redeliverers that offer mailbox redelivery and personal shopping services from other countries.
For each transaction, only 1 entity will be required to collect GST on the value of the good. There are rules for working out which of these businesses is treated as the supplier of the goods.
What does this mean for your overseas business clients?
Overseas businesses are required to register for GST if their total taxable supplies of low-value goods and services to New Zealand consumers exceeds or are likely to exceed NZ$60,000 in a 12-month period.
If your clients only supply goods for business use to GST-registered businesses in New Zealand, they don’t need to register.
You will be able to register your clients online from early September.
What does this mean for your New Zealand business clients?
Low-value goods sold by overseas suppliers and sent to GST-registered businesses in New Zealand, for use in their business (business-to-business supplies) are generally excluded from these rules. In limited circumstances, overseas suppliers may collect and return GST on these sales.
Overseas suppliers will charge GST to New Zealand GST-registered businesses unless your client provides the supplier with their GST number, New Zealand Business Number or informs them that they’re a GST-registered business.
Visit ird.govt.nz/GSTupdate for detailed guidance on these changes and to register your clients. If you have questions, email us at firstname.lastname@example.org