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Good and services tax (GST)

Do I need to register for GST in New Zealand?

New Zealand GST obligations for non-residents are often complex and you should consider the following four factors before you decide whether you need to register.

  • Are you a New Zealand resident for GST purposes?
  • Are you conducting a taxable activity in New Zealand?
  • Time and location of supplies and/or services.
  • Agreements.

Generally, the following applies:

If ... then ...
  • you are deemed a resident of New Zealand, and
  • you are conducting a taxable activity in New Zealand, and
  • your transactions exceed (or are likely to exceed) $60,000 in any 12-month period
you will need to register for GST.

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Are you a New Zealand resident for GST purposes?

The GST Act 1985 confirms that you are considered a resident for GST purposes if you meet any of the following requirements:

Individual requirements

If ... then ...
you have a permanent place of abode in New Zealand, regardless of whether you also have one outside of New Zealand you are a resident.
your presence in New Zealand is more than 183 days in any 12-month period you are a resident from your first day of presence here.


Note

The 183 days are a total number of days. They do not have to be continuous.

In addition, individuals should also take the following into consideration:

If you are ... then you are ...
absent from New Zealand, in a total of 325 days in any 12 month period deemed a non-resident of New Zealand from your first day of absence.
present in New Zealand for only a part of a day considered to be present here for the whole of that day.
absent from New Zealand in the service, in any capacity, of the Government of New Zealand deemed a resident during your absence.


Note

The 325 days are a total number of days. They do not have to be continuous.

Company requirements

A company is resident in New Zealand if:

  • it is incorporated in New Zealand, or
  • it has its head office in New Zealand, or
  • it has its centre of management in New Zealand, or
  • the control of the company by its directors, acting in their capacity as directors, is exercised in New Zealand, whether or not decision-making by the directors is confined to New Zealand.

In addition, companies should also take the following into consideration:

If ... then ...
a company is liable to income tax in a country or territory through domicile, residence, place of incorporation, or place of management it is deemed to be a resident in that particular country or territory.
a company is liable for income tax in two or more countries or territories through domicile, residence, place of incorporation or place of management the requirements described in the above table should be used to determine which country or territory the company is resident of.
a company's residence cannot be determined by applying the tests set out above the company is resident in the country or territory in which its centre of management is located.
a company's residence still cannot be determined by applying any of the above tests the company is resident in the country or territory in which the Commissioner determines.

If you or your company do not meet the above residency requirements, then you are still a resident for GST purposes if you carry on a taxable activity from a fixed or permanent place in New Zealand (see below).

What constitutes a fixed or permanent place?

We consider that the following characteristics indicate the existence of a fixed or permanent place:

  • It is a place of a business, eg a branch, factory, workshop, mine, quarry, oil well.
  • The place is fixed, ie has an identifiable place or site.
  • The person is using the fixed or permanent place in a productive manner in the course of their activity.
  • It is not showroom, promotional office or storage facility.

Ownership of premises

Ownership of the premises or space is not a deciding factor in whether a fixed or permanent place exists. The establishment could be rented or part of the premises of another business but if you carry on a business activity from that place, then you will be considered a resident for GST purposes, if that business activity meets the requirements of a taxable activity.

Note

If you are a resident for GST purposes, it is only to the extent of the taxable or other activity you carry on in New Zealand (ie only the supplies of goods and services actually made in New Zealand can be accounted for).

Residency for GST purposes is not determined solely on whether a taxable activity can exist in New Zealand. However it will affect what we consider to be a supply in New Zealand (see below).

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Are you conducting a taxable activity in New Zealand?

A taxable activity for GST includes:

  • any activity that is carried on continuously or regularly, and
  • involves, or is intended to involve the supply of goods and/or services to another person, and
  • payment is received for that supply, and
  • the supply does not necessarily have to be for profit.

If you meet this definition of a taxable activity then we consider that you have a taxable activity for GST in New Zealand. A taxable activity in New Zealand requires that GST is charged on supplies made but allows GST input credits for GST incurred on expenditure in New Zealand.

Taxable supplies

A taxable supply, by definition, is goods and services supplied in New Zealand in the course of conducting a taxable activity.

Any supply by a non-resident in New Zealand is not automatically considered to be a taxable supply. However, please note that a taxable activity cannot exist without taxable supplies.

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Time and location of goods and/or services

When determining whether you need to register for GST, you also need to consider whether:

  • the goods are in New Zealand at the time of supply; or
  • the services are performed in New Zealand by a person who is in New Zealand at the time the services are performed

Goods

Generally, the following rules apply to goods:

If you ... and ... then ...
are a resident you make a supply the supply is considered to be made in New Zealand.
are a non-resident you make a supply the supply is considered to be made outside of New Zealand.

Services

To determine when GST is charged on services, use the following table:

If the ... the New Zealand supplier ... and the overseas supplier ...
service is performed in New Zealand charges GST charges GST unless it is supplied to a GST-registered person and the parties have agreed not to charge GST.
service is performed outside New Zealand zero-rates GST does not need to charge GST.

Non-residents

GST obligations for non-residents are often complex, especially when discussing whether the goods are in New Zealand at the time of supply or not.

If you are deemed a non-resident for GST purposes, you need to read the following situations and see whether they apply to your business as it will help determine whether your goods are in New Zealand at the time of supply or not.

If ... then ... Note
the goods are in New Zealand at the time of supply the supply is considered to be made in New Zealand.  
the services are performed in New Zealand by a person who is in New Zealand at the time the services are performed the supply is considered to be performed in New Zealand.  
the goods are supplied to a New Zealand GST-registered person for the purposes of carrying on their taxable activity in New Zealand the supply is considered to be made outside of New Zealand. This does not apply if the supply is made to a non-GST-registered person.
the services are performed for a New Zealand GST-registered person for the purposes of carrying on their taxable activity in New Zealand: the services are considered to be performed outside of New Zealand. This does not apply if the services are performed for a non-GST-registered person.
  • the goods are supplied to a New Zealand GST-registered person for the purposes of carrying on their taxable activity in New Zealand, and
  • there is an agreement between you and the New Zealand person that the supply will be treated as a taxable supply in New Zealand
the supply is considered to be made in New Zealand. This does not apply if the supply is made to a non-GST-registered person.
  • the services are performed for a New Zealand GST-registered person for the purposes of carrying on their taxable activity in New Zealand, and
  • there is an agreement between you and the New Zealand person that the services will be treated as a taxable supply in New Zealand
the services are considered to be performed in New Zealand. This does not apply if the services are performed for a non-GST-registered person.

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Agreements

You (the non-resident supplier) and the New Zealand party you are supplying the goods and/or services to, can agree that the supply is a taxable supply in New Zealand and therefore GST is to be charged and paid here.

The agreement has to be in writing and must be made before the time of supply. We cannot accept a backdated agreement as the character of the transaction can't be changed, once the transaction has taken place.

Note

This applies only to non-resident suppliers and the goods must be in New Zealand or the services performed in New Zealand for the parties to be able to enter into an agreement.

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Customs

When goods are imported into New Zealand, GST is charged on the landed value (including insurance and duties) of the goods. The landed value of any goods is assessed by the New Zealand Customs service.

If your name is on the Customs invoice then you are required to pay the invoice, including the GST. If you are registered for GST you can claim this as a GST credit (expense) on your return.

Note

The importer of the goods does not need to be the owner of the goods. The New Zealand Customs Service accepts a variety of invoices. For more information please visit the New Zealand Customs Service website.

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Claiming input credits

It is important to remember if you are a non-resident making taxable supplies in New Zealand then you can only claim GST on your expenses if the goods and/or services were acquired for the principal purpose of making taxable supplies in New Zealand.

If you ... then ... and you ...
do not make taxable supplies in New Zealand there is no taxable activity in New Zealand
  • cannot register for GST, or
  • claim GST input credits.

 

Note

Tax invoices, in the claimant's name, must be held in support of all GST input claims.

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If you fail to meet your GST obligations

Failing to comply with your GST obligations can be a large financial risk and you may be charged penalties. We understand that in some cases, failure to comply might be unintentional. If you find that you've made a mistake, please contact us as soon as possible.

Note

The Commissioner has the discretion to deregister non-residents from GST if you are not conducting a taxable activity in New Zealand.

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Find out more

If you are a non-resident and you believe that your GST situation is complex, then we recommend that you seek professional advice before commencing any business in New Zealand. Alternatively, you can contact our Non-resident Centre in Dunedin.

For more general GST information:

Visit our GST section.
Read or download our GST guide (IR375) and GST plus (IR546) guide
Read our Business Tax Update newsletter issued each month.

 


Date published: 16 Dec 2010

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