This documentation is for Taxamo v1. If your account is with Taxamo v2 use the documentation at integrate.taxamo.com/doc.
If you are uncertain of your version please contact support@taxamo.com for assistance.

Do foreign suppliers need to charge goods and services tax (GST) on sales to New Zealand?

Yes. On October 1, 2016, the New Zealand Taxation (Residential Land Withholding Tax, GST on Online Services and Student Loans) Act 2015 became law. From this date a goods and services tax (GST) needs to be added to the supply of remote digital services to New Zealand-based consumers from an offshore supplier.

Is there a GST registration threshold?

As a consequence of proposed the new rules, non-resident suppliers will be required to register and return GST when their supplies of remote digital services to New Zealand exceed NZ$60,000 in a 12-month period. Supplies to New Zealand GST-registered businesses will only count towards this threshold if the parties agree that the supply is zero-rated.

How do suppliers prove their consumer’s location in New Zealand for GST purposes?

The offshore digital service supplier is required to determine their consumer’s location based on two non-conflicting pieces of evidence.

The new legislation provides a list of acceptable proxies that can be used to identify the location of the end consumer. These proxies include:

  • The consumer’s billing address
  • The bank identification number (BIN) on the consumer’s credit card used to purchase the digital service
  • The internet protocol (IP) address of the device used by the person or another geolocation method
  • The consumer’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 SIM card in the phone used by the consumer
  • The location of the consumer’s fixed landline through which the service is supplied to them
  • Other commercially relevant information. According to the New Zealand legislation examples of such commercially relevant information are the customer’s trading history (such as the previous billing address of the customer) or the product purchased if it is linked to a geographic location (for example, some gift cards may only be used in a particular country). Information provided by a third party, such as by a payment service provider, can also be used if it is commercially relevant.

What remote services are in scope for GST in New Zealand?

A “remote service” is defined in New Zealand’s GST legislation as a service that “at the time of the performance of the service, has no necessary connection between the physical location of the recipient and the place where the services are performed.”

Examples of services that could be supplied as remote services include:

  • Supplies of digital content such as e-books, movies, TV shows, music and online newspaper subscriptions;
  • Online supplies of games, apps, software and software maintenance;
  • Webinars or distance learning courses;
  • Insurance services;
  • Gambling services;
  • Website design or publishing services; and
  • Legal, accounting or consultancy services.

Examples of services that would not be remote services include:

  • Accommodation services;
  • Hairdressing, beauty therapy and physiotherapy;
  • Car rental services;
  • Entry to cinema, theatre performances, sports events and museums;
  • Gym memberships;
  • Passenger transport services; and
  • Restaurant and catering services.

What is the New Zealand GST rate?

The New Zealand GST rate is 15%. Note that the New Zealand GST legislation makes a particular point that “remote services” supplied to New Zealand residents by an offshore supplier be subject to this GST rate of 15%.

How do I register for GST in New Zealand?

Non-resident suppliers of digital services must register for New Zealand GST purposes if they have sales to New Zealand consumers of NZD$60,000 or greater in the last 12 months, or if sales are expected to exceed this amount in the next year.

Non-resident suppliers exceeding this threshold will need to register for GST purposes in New Zealand. To register, non-resident suppliers need to complete the Application to register for GST on remote services by a non-resident business (IR994) form and email it to the New Zealand Inland Revenue Department at info.gors@ird.govt.nz.

Affected non-resident suppliers can also post a completed registration form to:

Non-resident Centre, \ New Zealand Inland Revenue, \ Private Bag 1932, \ Dunedin 9054, \ New Zealand.

How do I enable GST for New Zealand in Taxamo?

Assuming your product/services qualify as digital goods/services in New Zealand and you are above the threshold to pay GST in New Zealand, then complete the following steps:

  1. Log into the Taxamo Merchant Portal and go to: My account > Tax regions.
  2. Enable in test mode or live mode for the relevant dates.
  3. Enter your New Zealand Business Number (NZBN). Here you also have the option of proceeding without entering your NZBN. You can add the number once you have finalised your registration with New Zealand’s Inland Revenue Department.

Notes:

A. If you are below the New Zealand threshold of NZD$60,000 you can continue sending all of your transactions to Taxamo. We will send an alert when the value of sales to your New Zealand consumers approaches the threshold limit. At which time you should turn this region on in your Taxamo account settings.

B. If you are using an integration other than the Taxamo API or the Taxamo checkout form, please confirm that your integration type has been upgraded to support New Zealand.

How do I pay the GST due to the New Zealand Inland Revenue Department?

You can make a payment from overseas to New Zealand’s Inland Revenue Department (IRD) via any of the following methods:

  • Credit or debit card
  • International money transfer
  • PayWay direct debit if you’re in Australia
  • Telegraphic transfer
  • Foreign bank draft
  • Personal foreign cheque

This helpful page on the New Zealand IRD further explains these GST payment methods that are available to international digital service suppliers.

How often are GST returns filed?

Quarterly. At the start of the new GST system the New Zealand government intends to allow non-resident suppliers to register for GST from August 1, 2016.

Non-resident suppliers that need to return GST will be required to file a return for any services supplied from October 1, 2016. Between October 1, 2016, and March 31, 2017, affected suppliers will be able to either file one six monthly return or three two-monthly returns.

NOTE: All returns from April 1, 2017, must be filed quarterly.

What are the invoicing requirements for companies registered with New Zealand’s GST system?

A New Zealand GST invoice must include the following information:

  • The GST on the goods and services provided
  • It must be in New Zealand currency, and
  • Must be original. The GST-registered supplier can only issue one original tax invoice for each taxable supply. If the purchaser loses the invoice, the supplier may issue a copy. It must be clearly marked “copy only”.

The information a tax invoice must show depends on the value of the goods and services supplied, more information here.

How are sales in foreign currencies treated?

New Zealand’s Inland Revenue Department (IRD) uses wholesale rates from Bloomberg for rolling 12-month average, mid-month actual and end of month. More details can be found here.

You may choose to use the conversion rate that applies at the following times to determine the amount of GST to be paid:

  • The time of the supply
  • End of each taxable period
  • The time of filing the return
  • Another time: if agreed with the Commissioner of Inland Revenue.

What are the rounding rules for the GST return?

For New Zealand goods and services tax (GST) returns are normally filed showing actual amounts in dollars and cents rather than being rounded to whole dollar figures.

How are adjustments treated under the new GST legislation?

Adjustments can be made by supplier in the return which it is apparent that the mistake has been made, i.e. in the original tax return.

How are refunds processed?

To process a GST refund New Zealand’s Inland Revenue Department will review supporting information to see how you calculated your requested refund.

This supporting information that should accompany your GST return includes the following information:

  • A worksheet, or report, showing how you’ve calculated the amounts recorded on the return
  • Copies of all the tax invoices
  • Proof of payment for each of the tax invoices. If this includes a copy of your bank statement, you’ll need to note against the payment which invoice it relates to, especially if the amount paid is different to the tax invoice amount because of currency differences.

Supporting documents can be emailed to 54Bnon-res@ird.govt.nz or posted to:

Non-resident Centre, \ New Zealand Inland Revenue, \ Private Bag 1932, \ Dunedin 9054, \ New Zealand.

New Zealand’s Inland Revenue Department aim to have refunds approved and posted within 90 working days of receiving a non-resident supplier’s GST return. The tax department will inform you if the refund will take longer than 90 working days.

How long should data be retained for audit purposes?

For GST purposes tax records are normally required to be retained for 7 years and supplied to the IRD in a timely manner if requested for audit purposes.

As per New Zealand’s GST Act the term records includes books of account (whether contained in a manual, mechanical, or electronic format) recording receipts or payments or income or expenditure, and also includes vouchers, bank statements, invoices, tax invoices, credit notes, debit notes, receipts, and such other documents as are necessary to verify the entries in any such books of account.

Under the new Section 75 (3F) of the GST Act non-resident suppliers of remote services may choose to keep records outside New Zealand and in a language other than English without having to first obtain the consent of the Commissioner.

How can I contact the New Zealand Inland Revenue Department?

The general enquiries number for New Zealand Inland Revenue Department is: +64 3 951 2020.

The local calling times are Monday to Friday, from 8am to 8pm; Saturday, 9am to 1pm.

More information here.