Changes to NZ GST rules for low-value imported goods

In an increasingly disrupted world, the laws surrounding consumer processes sometimes need to play catch up.

From 1 December 2019, overseas businesses selling low-value goods to consumers in New Zealand may need to register for, collect and return NZ Goods and Services Tax (GST) of 15% on goods valued at or below $1,000.

Low-value goods are those valued at NZ$1,000 or less (excluding GST). Examples include books, clothing, cosmetics, shoes, sporting equipment and electronic items. New Zealand Customs Service will continue to tax goods sold for more than NZ$1,000 at the border as they come into New Zealand.

With the significant growth of online shopping in the everyday lives of New Zealanders, this proposal by the Inland Revenue seeks to level the playing field so that offshore firms cannot undercut our domestic retail sector.

This is good news for retail businesses in NZ. The Inland Revenue will have greater transparency of the transactions between New Zealand customers and offshore suppliers.

Businesses must register for GST if their total sales, including services, digital products and low-value goods, to consumers in New Zealand exceed or are likely to exceed NZ$60,000 in any 12-month period from 1 December 2019.

The rules apply to overseas businesses selling low-value goods directly to New Zealand consumers, as well as online marketplaces and re-deliverers.

From early September 2019, overseas businesses will be able to register.

You can find out more in the IRD policy update.