Key News Summary – New Zealand introduced a Bill into its Parliament, on 5 Dec 2018, to impose NZ GST on foreign suppliers of goods and services of a value under NZ1,000, if their turnover exceeds the NZ registration turnover threshold of NZ$60,000 and associated changes.


 

The Taxation (Annual Rates for 2019-20, GST Offshore Supplier Registration, and Remedial Matters) Bill was introduced in the NZ Parliament on 5 December 2018.

It proposes to impose require foreign suppliers to register, in NZ, if the turnover, from their taxable supplies to New Zealand, exceed their GST Turnover Registration Threshold of NZ $60,000. Those foreign suppliers would then have a liability to pay NZ GST on ‘low-value’ sub-NZ$1,000 supplies of goods to consumers. This is proposed to come into effect from 1 October 2019.

  • The amendments proposed in the Bill would apply GST to imported goods valued at or below NZ$1,000 that are imported from offshore suppliers by consumers in New Zealand.
  • There would be no GST obligation for supplies to entities registered for GST.
  • They would require the offshore supplier to register for and return GST on these supplies.
  • Offshore suppliers may have the option to also charge GST on their supplies of goods, over NZ$1,000, to consumers in New Zealand.
  • The New Zealand Customs Service will cease to collect any form of duty on consignments valued at NZ$1,000 or less, except for tobacco products or alcoholic beverages.
  • Customs will however continue to collect GST on imported parcels valued above NZ$1,000, from the importer.
  • The proposed amendments contain rules to prevent double taxation by requiring Customs to not collect GST on goods that have already had GST collected on them at the point of sale by the offshore supplier.

[NZ Legislation website: Bill; Explanatory Note; LTN 237, 7/12/18; Tax Month – December 2018]

FJM 12.1.19

CPD (comprehension) questions

  1. Would this Bill impose NZ GST on foreign suppliers of sub-NZ$1,000 supplies of goods and services, to NZ consumers, if their NZ turnover exceeds the NZ turnover registration threshold of NZ$60,000?
  2. What is the situation for foreign suppliers, for NZ supplies of over NZ$1,000?
  3. What is the usual position of a NZ importer of goods and services over NZ$1,000?
  4. How will the Bill deal with the possibility of double GST on imports?
  5. When would this new regime start?

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