Page 58 - English-DBINZ brochure-2019

55 Doing business in New Zealand

by that person on supplies received to make taxable supplies. Other specified supplies are exempt from
GST. The main exempt supplies are domestic financial services, leases of residential accommodation,
salary and wages, and supplies of fine metal.
GST also applies to cross-border “remote” services and intangibles supplied by non-resident suppliers
(including e-books, music, videos and software purchased from offshore websites) to New Zealand-
resident consumers. These new rules require non-resident suppliers to register and return GST on
these supplies if the supplies in aggregate exceed, or are expected to exceed, NZ$60,000 in a 12-month
period.

The New Zealand government is proposing to require offshore suppliers to collect GST on purchases of
“low-value goods” (NZ$1,000 or less) made by New Zealand consumers who are not registered for GST
from 1 October 2019.
Technically, GST has always been payable on imports of low-value goods. However, until recently there
has been an understanding that the Customs Service will not collect less than NZ$60 worth of GST (the
amount imposed on goods worth NZ$400).
The growing popularity of internet shopping websites has given rise to a perception among New Zealand
businesses that they are being unfairly disadvantaged by the GST de minimis. In order to address this
disparity, the Government has proposed new rules which will require offshore suppliers to collect GST
on low value goods at the point of sale. GST will continue to be collected at the border for goods over
NZ$1,000.
Offshore suppliers will be required to register and return GST if their total supplies in a 12-month period
to New Zealand consumers are equal to or greater than NZ$60,000. This is the same threshold for GST
registration that applies to New Zealand-resident businesses and non-residents supplying services into
New Zealand.
The proposal also includes specific rules for marketplaces and “re-deliverers”.

MARKETPLACES

When an offshore supplier sells their goods through an electronic marketplace, the new rules deem that
the marketplace has made the supply in the course or furtherance of their taxable activity. Accordingly,
the marketplace will be required to register and return the GST on the supply instead of the supplier.

Electronic marketplaces will be required to register, whereas non-electronic marketplaces may register
with the Commissioner’s approval.

An “electronic marketplace” must have the following attributes:
ə The marketplace must allow underlying suppliers to make supplies of remote services through the
marketplace to customers
ə The marketplace must be operated by electronic means, including by a website, internet portal,
gateway, store, distribution platform or other similar marketplace
ə The supplies made by the marketplace must be made by electronic means.
Payment providers have been excluded from the definition of “electronic marketplace”.