New Zealand GST remittance
New Zealand GST remittance
Learn how Zonos has prepared to manage the upcoming New Zealand tax law.
The New Zealand law, intended to target the taxation of imported goods, will go into effect on December 1st, 2019. This new law is very similar to the low-value goods law enacted by Australia in 2018.
Let’s decode this law to help you understand if you are impacted and what you will need to do.
Am I impacted?
This new law will impact your business processes if you supply (or are likely to supply) more than NZ$60,000 in low-value goods and services directly to New Zealand consumers within a 12-month period.
Where possible, Zonos will be notifying those that are close to this NZ$60,000 threshold, but you are also welcome to verify your sales to New Zealand consumers.
You should consider the following to determine if you’re over the NZ$60,000 threshold.
- Low-value goods each valued below NZ$1,000 and sold directly to New Zealand consumers
- Online services and digital products sold directly to New Zealand consumers
- Amounts paid by New Zealand consumers for services such as delivery, insurance, etc.
When determining if you meet the threshold, do not include supplies sold to New Zealand businesses or goods each valued over NZ$1,000.
What do I do if I’m below the NZ$60,000 threshold?
Nothing! There will be some new rules for duty and tax calculations for orders into New Zealand after December 1st, 2019, but Zonos has it covered. In fact, this new law will result in more duty and tax free shipments for your New Zealand customers, which should translate into more sales for you!
Zonos Hello can help inform New Zealand customers when they will not have to pay any duties or taxes. This may help you increase sales!
What if I’m over the NZ$60,000 threshold?
First, be grateful that you have so many amazing New Zealand customers!
Second, take a deep breath and feel confident that Zonos is here to help.
Here are a few things that Zonos is here to help you accomplish so you’ll be ready for this new law.
1. Register for New Zealand GST.
The first step is to obtain a tax ID for New Zealand, which you can use for the collection and remittance of GST on your orders to New Zealand. Zonos can register for New Zealand GST on your behalf, or you can handle it yourself online.
2. Collect GST on all orders.
Similar to Australia, you will now be required to collect GST (New Zealand’s sales tax) on all of your New Zealand orders. A simple update to your Zonos account will handle this. Reach out to Zonos for more details.
3. Update shipping documentation.
You’ll need to let New Zealand customs know that you have already collected GST on your order. The simplest way to handle this is to process your shipment through the Zonos Dashboard and have our system handle the appropriate notifications for you.
If shipping through your software, you can include a statement in the comments section of the commercial invoice that includes an explanation along with your GST number. An example statement might read: “GST has been collected at the point of sale for all items in this consignment and will be remitted via GST # 123456789.”
4. Supply a customer receipt/tax invoice.
As part of the new law, you must supply a receipt to your New Zealand customers that notifies them of the GST that applies to their order. Zonos offers a service to send a compliant receipt/tax invoice on your behalf. Reach out to Zonos for details on enabling this service.
If you elect to handle the receipt/tax invoice on your own, then you can take a deeper dive into the requirements by viewing our in-depth New Zealand taxation guide along with our sample receipt/tax invoice.
5. Refund GST on sales to New Zealand businesses.
You are technically not required to collect GST on goods purchased by a New Zealand business for business use. For most Zonos customers, it’s not feasible or practical to make this kind of determination at checkout. Zonos recommends collecting GST on all orders, then a New Zealand business can use the receipt/tax invoice that you supplied them to claim a GST deduction on their GST return for orders valued less than NZ$1,000.
For orders over NZ$1,000, you will be required to issue a refund of GST to the New Zealand business. You may also choose to refund lower value orders as a courtesy to your customers.
Zonos can filter and approve all of your GST refund requests. Simply direct your customers to our web form. We will review the request and notify you of the approval.
6. Remit GST quarterly.
The GST you collect from New Zealand consumers must be remitted quarterly to New Zealand Inland Revenue. Contact Zonos for more information on having Zonos handle this process for you. You may also view our in-depth New Zealand taxation guide for more information on how to handle this process yourself.
This article on New Zealand GST remittance is intended for merchants selling primarily to New Zealand consumers and do not sell alcohol or tobacco into New Zealand. Contact us if you need to discuss a more advanced setup for your store. You can also view our more detailed New Zealand taxation guide.