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GST law change for non-resident businesses supplying remote services

Goods and services tax (GST) is New Zealand's consumption tax. It is a 15% tax added to the price of most goods and services supplied in New Zealand, including most imported goods and services.

From 1 October 2016 if you're a business that is not resident in New Zealand supplying remote services from outside New Zealand to a customer who is resident in New Zealand, you may be required to register for New Zealand GST, and return GST on these supplies.

Services that may require your non-resident business to register for New Zealand GST and charge GST on supplies made to New Zealand resident customers include online gaming, gambling, video streaming and music streaming services.

Read the terms we use in our information

Non-resident businesses supplying online services may need to register for GST

Non-resident businesses  that supply remote services, including online services, from outside New Zealand to New Zealand resident customers will be required to register for GST if they meet certain conditions. 

Note

You may need to register if you had sales to New Zealand consumers of $60,000 (NZD) or greater in the last 12 months, or expect your sales to be more than $60,000 in the next 12 months.

If your customer is a New Zealand resident

You won't need to return GST if you supply services to a New Zealand GST-registered business.

To confirm if your customer is a New Zealand resident you'll need to check you have two non-conflicting pieces of evidence that indicate the recipient of the service is a New Zealand resident. You can use as evidence:

  • the person's billing address
  • the internet protocol (IP) address of the device used by the person or another geolocation method
  • the person's bank details, including the account the person uses for payment or the billing address held by the bank
  • the mobile country code of the international mobile subscriber identity stored on the subscriber identity module (SIM) card used by the person
  • the location of the customer's fixed land line through which the service is supplied to them
  • any other commercially relevant information.

Suppliers should treat New Zealand resident customers as not registered for GST unless the customer states they are GST-registered, or provides their GST registration number or a New Zealand business number.

Read the examples showing whether non-resident businesses are required to register for GST

Example - non-resident business meets the requirements to register as a non-resident GST business supplying online services

 

Worldwide Games Ltd is a non-resident business with a worldwide turnover of $20 million. They provide online services to customers in a number of countries, including $75,000 (NZD) annual sales to New Zealand resident customers who aren't GST-registered businesses.

As supplies of these services to New Zealand resident customers exceed the registration threshold, Worldwide Games Ltd is required to register for New Zealand GST and charge GST of 15% on these services. As a GST-registered non-resident business, Worldwide Games Ltd will need to file GST returns and return the GST collected from its New Zealand customers.

Example - non-resident business is not required to register as a non-resident GST business supplying online services

XYZ Ltd is based in the United Kingdom and supplies webinar based learning courses to a New Zealand GST registered business. As these services are supplied to a New Zealand GST registered business XYZ will not have to return GST in New Zealand.

Filing GST returns when you're registered for GST

While registered with us, a GST return must be filed for each taxable period. If you haven't made any sales in a period, you must file a "nil" return

These changes are effective for taxable periods that begin on or after 1 October 2016.  From 1 August 2016 you can apply to register for GST, with effect from 1 October 2016. 

You'll be required to file a return for any services supplied from 1 October 2016.  Between the period of 1 October 2016 to 31 March 2017 you can either file one six monthly return or three two-monthly returns.  All returns from 1 April 2017 must be filed quarterly.

If you have a query you can contact us by email on info.gors@ird.govt.nz