New Zealand VAT Rules: End of Low-Value Consignment Stock Relief
New legislation in New Zealand has now taken effect.
From 1 December 2019, New Zealand has removed the 15% Goods and Services Tax exemption for everything at or below NZD 1,000 (€570).
GST will now be charged at the time of sale of the goods. This new legislation means that foreign sellers who make (or expect to make) sales into New Zealand and reach the registration threshold of NZD 60,000 within a 12 month period will be required to register for GST purposes and charge 15% GST on supplies at the time of the sale of the goods.
How will this impact companies trading in New Zealand?
For goods above NZD 1,000, the current GST import collections at the border will still apply and New Zealand Customs will collect GST. If multiple goods are purchased in one transaction and the total transaction exceeds NZD 1,000 – GST should be charged on all individual goods costing less than NZD 1,000 by the foreign seller. For example, if 5 items costing NZD 300 each are purchased (total of NZD 1,500), GST of NZD 225 should be charged by the foreign seller. If a consignment includes a mixture of items that are above and below NZD 1,000, then New Zealand
Customs may collect GST at the border. The determination of the GST liability will be based on the delivery address of the customer. There is no requirement to charge GST for sales to GST-registered businesses in NZ.
Foreign providers will now need to supply specific details before goods arrive at the New Zealand border.
Foreign sellers will have to provide a GST receipt to customers that provide specific details about the supplies. The foreign provider will also need to ensure that New Zealand customs have the below details available when the goods reach the NZ border:
1. The name and registration number of the supplier,
2. Details of the goods that are supplied with the GST charged,
3. Details of any goods that are supplied that do not have GST charged.
Foreign providers that are already GST registered under the remote services rules do not need to re-register. Online marketplaces that facilitate sales to NZ may now be held liable for GST
collections instead of the underlying supplier.
GST returns will be quarterly and will be due in March, June, September and December (first return period being from 1 December 2019 to 31 March 2020).