When you’re selling goods or services over the internet, you have the same tax obligations as any other business.
Work out if you're in business
Trading online is the same as doing business from a shop, or from your home. Any income you earn from a business (including online auctions or sales sites such as TradeMe) needs to be included in your income tax return. There is no minimum income level to be in business.
If you’re trading online and answer yes to some or all of the following questions, it’s likely you’ll need to declare the income you’ve earned.
- Did you buy goods with the intention of reselling them?
- Did you intend to make a profit from the sale?
- Are you providing services in return for payment? (The payment does not have to be cash.)
- Do you regularly sell goods or services online?
- Do you sell online as part of an already established business?
Claiming expenses
When you’re in business, you can claim certain expenses.
Some expenses are specific to trading over the internet. For more information about these read our Online trading tax implications - IR1022 factsheet.
Registering for GST
If you’re providing goods or services and your turnover is more than $60,000 in any 12-month period or is likely to be more than $60,000 in the next 12 months, you’ll need to register for GST.
You can also choose to register you earn less than $60,000.
Tax advice
We monitor online transactions. If you’ve been trading online for some time and you think you’ve overlooked your tax obligations, talk to a tax professional or contact us.