New Zealand is changing the goods and services tax (GST) on
low-value imported goods. The Taxation (Annual Rates for
2019-20, GST Offshore Supplier Registration, and Remedial
Matters) Bill was introduced in New Zealand's Parliament in
The Bill follows a government discussion document released
in May 2018 (discussion document), which proposed requiring
offshore suppliers to collect GST on low-value goods to be
supplied to consumers in New Zealand.
Currently, New Zealand's Customs Service collects import
duties and GST on imported goods. GST is not collected on
imported goods where the amount of duty or taxes collectable is
less than NZ$60 ($40), which equates to NZ$400 worth of goods
if GST is the only relevant duty.
In recent years, online shopping and e-commerce have led to
an increase in the volume of low-value goods imported into New
Zealand and, therefore, an increase in the volume of goods on
which no GST is collected. This has led to concerns that
domestic retailers might be at a competitive disadvantage by
having to charge GST on their sales while foreign online
sellers could sell low value goods to New Zealand consumers
without charging GST.
As a result, the Bill would require GST to be collected and
returned on goods with a value of NZ$1,000 or less that are
supplied by a foreign supplier to a New Zealand consumer. The
NZ$1,000 threshold is an increase from the NZ$400 threshold
originally proposed in the discussion document.
As proposed in the discussion document, offshore suppliers
that supply NZ$60,000 or more of goods or services to New
Zealand consumers would be required to register for and return
GST on those supplies. This is consistent with the threshold at
which domestic suppliers are required to register for GST.
Other key aspects of the proposal include:
a) Electronic marketplaces would be required
to register and return GST (as opposed to the actual supplier)
when applicable goods are supplied through the marketplace to a
New Zealand consumer. One result of this may be that offshore
suppliers supplying goods through an electronic marketplace
would have GST affect their pricing, despite the supplier
itself not meeting the NZ$60,000 threshold;
b) Re-deliverers of goods could also be
required to register for and return GST if certain conditions
are satisfied (such as the actual supplier of the goods not
delivering, arranging or assisting the delivery of the goods to
New Zealand); and
c) The proposed amendments would not require
the collection of GST on supplies of low-value goods to
GST-registered New Zealand businesses.
The proposed amendments in the Bill, if enacted, would apply
to supplies made on or after October 1 2019. The Bill has been
referred to Parliament's Finance and Expenditure Committee,
with submissions being accepted until February 28 2019.
Tim Stewart (email@example.com) and Young-chan
Tel: +64 4 819 7527