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Australia brought in legislation which impacts on some New Zealand companies supplying product back to Australia.

The new rules particularly impact on Internet sellers and other New Zealand businesses that supply product to consumers in Australia (rather than those that supply to Australian businesses).

If your New Zealand business is selling product to Australian consumers and the annual sales exceed A$75,000 in a 12 month period you are now required to charge your Australian resident customers 10% Australian GST and account for that to the ATO.

In practical terms this is likely to impact on clothing and other products and services where the product is sent directly from your company in New Zealand to a final consumer in Australia. The regime relates to consignments to customers when the value of the consignment is less than A$1,000.

It will not apply to you if the consignments are worth more than A$1,000 or are a tobacco product or an alcoholic beverage. In these circumstances GST will be charged by Australian customs.

It is not the same regime that usually applies to Australian businesses who charge customers 10% GST, deduct the GST paid on Australian supplies and account for the difference in their quarterly BAS statements to the ATO.

This new rule effectively puts you in the position as a tax collector. You charge your Australian customer 10% Australian GST and account for that. You don’t have an opportunity to deduct any GST charged to you from Australian suppliers or service providers.

You will not need to charge Australian GST if the customer provides their Australian business number (ABN) providing they confirm that they are GST registered in Australia.

If this regime applies to you and we currently prepare and lodge your New Zealand GST returns, let us know and we will register you at no charge.

You can give us a call on 1300 791 600 for a quick chat.

 

The information in this article is indicative of NZ tax rules and changes and not intended to be complete for all intents or purposes and does not constitute advice. It is recommended that you obtain professional advice, suited to your particular circumstances, from us before acting on anything you read.