If your Australian-owned business provides accommodation in New Zealand through online platforms like Booking.com or Airbnb, there’s an important Inland Revenue update you should know about. From 1 April 2025, new rules will apply to how GST is handled for motels and hostels that list on electronic marketplaces.
The new Inland Revenue Determination DET 25/01 sets specific criteria for when accommodation providers can opt out of the electronic marketplace GST rules. For many small operators, this determination could simplify compliance and ensure GST is reported correctly across both your direct and online bookings.
Who does this apply to?
This determination mainly affects New Zealand hostels and motels that:
- Were registered for GST on or before 1 April 2024, and
- Exceed the NZ$60,000 GST registration threshold in a 12-month period, and
- Supply accommodation both directly and through an electronic marketplace such as Airbnb, Booking.com, or Expedia.
These businesses can now enter into opt-out agreements with marketplace operators if they meet the criteria. This is significant for Australian business owners who operate small to medium accommodation ventures in New Zealand, as it gives more flexibility in managing GST obligations.
Why this matters for Australian-owned accommodation providers
Under previous rules, accommodation providers with annual supplies under NZ$500,000 or fewer than 2,000 room nights listed on a single marketplace couldn’t opt out. That meant the marketplace operator, not the accommodation provider, was treated as the supplier for GST purposes.
The new determination, however, allows certain hostels and motels to opt out even if they don’t meet those thresholds, provided they satisfy the Inland Revenue’s criteria. This change recognises that some smaller operators still maintain direct customer relationships and manage their own GST compliance.
Key dates and compliance period
Applies from: 1 April 2025
Expires on: 31 March 2028
This gives affected businesses three years to adjust their systems and review how GST is accounted for on platform-based and direct sales.
What should you do next?
If your business operates New Zealand accommodation from Australia, this is the time to:
- Review your GST registration status in New Zealand.
- Assess your eligibility for an opt-out agreement under DET 25/01.
- Update your marketplace contracts to reflect your GST obligations correctly.
Our team at NZ Tax Accountants specialises in helping Australian-based business owners understand and manage their New Zealand GST responsibilities. We can help you determine whether the new rules apply to you and guide you through the process of setting up compliant opt-out arrangements.
Contact us today to discuss how this GST determination may affect your business and ensure you remain compliant on both sides of the Tasman.
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.