This is a reminder from our earlier blog post where we gave notice that the New Zealand government was now requiring suppliers of certain services into New Zealand to be registered, and therefore account for, New Zealand GST even though you may not be operating from a business in New Zealand.
We are getting a lot of enquiries from Australian businesses confused about if their products are included in this new New Zealand GST requirement.
In general terms, the types of services include:
- digital content such as e-books, movies, TV shows, music and online newspaper and magazine subscriptions;
- games, apps, software and software maintenance;
- online gambling services;
- website design or web publishing services; and
- legal, accounting, insurance or consultancy services
The threshold is NZD$60,000 per annum. Please remember that it is not just a retrospective test. The New Zealand GST threshold is based on sales over the last 12 months or the likelihood of sales over the next 12 months.
Therefore, if your sales to New Zealand are more than $5000 per month then there is a likelihood that it will exceed $60,000 per annum and you should therefore register.
There is an important exemption though.
If your product is sold to New Zealand businesses who are GST registered and are using your product as part of their business activity, then the sales do not count when determining if you are required to register under the $60,000 threshold requirement.
Therefore, if you are selling online training services to a New Zealand business who is registered for GST, and this training is to help them do business more effectively, then you will not be required to register for GST providing:
- they inform you that they are GST registered; and
- they provide you with their New Zealand GST registration number or their New Zealand Business Number.
If your New Zealand customers customers do not provide evidence that they are GST registered then you will need to charge New Zealand GST of 15% and account for that to Inland Revenue.
We can assist with registering your organisation for an IRD number (if you don’t have one) or complete the New Zealand GST registration process on your behalf.
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.