Monday -Friday - 9:00 - 18:00 New Zealand Time

GST application on Distantly Taxable Goods from 01st December 2019

 

Soon non-resident merchants, operators of electronic marketplaces and redeliveries to register and return GST on these supplies if the supplies in aggregate exceed, or are expected to exceed, NZ$60,000 in a 12-month period.

 

The new rules are consistent with the current GST broad base approach. Currently, there is no duty on low value imported goods (up to $400) but new rules will be applicable to all offshore merchants. Including amazon and any other merchant.

Distantly taxable” goods are generally defined as goods that:

  • individually have a value of NZ$1,000 or less;
  • are outside New Zealand at the time of supply;
  • are supplied by a non-resident; and
  • are delivered to New Zealand.

 

Key points

 

  • Non-resident suppliers will not be required to return GST on supplies to New Zealand GST-registered businesses, nor will they be required to provide tax invoices.

 

  • A rule requires non-resident suppliers to presume that a New Zealand customer is not a GST-registered business unless the customer has provided their GST registration number.

 

  • Suppliers may have the option to also charge GST on their supplies of goods valued over NZ$1,000 to consumers in New Zealand.

 

  • The New Zealand Customs Service (Customs) will continue to collect GST on consignments with a total value in excess of NZ$1,000.

 

  • It applies to Marketplace and redelivers as well.

 

  • For distantly taxable goods supplier there will be two kind of returns Simplified GST return and Full GST return. In simplified there will not be any option to claim expenses. Applicants who indicate that they intend to return GST and claim GST may be asked to provide further information about their business during the registration process to better confirm their identity. These applicants will be required to file a full GST return.   

 

Legislation

New section 8(3)(ab) has been inserted into the place of supply rules, which treats supplies of “distantly taxable goods” (as defined) supplied by a non-resident to a person providing a delivery address in New Zealand as a supply made in New Zealand, and therefore subject to GST.

 

Source TIB Vol 31 No 8 September 2019