Updates to GST on Low Value Imported Goods

Inland Revenue have announced some changes to GST on low value imported goods.

From 1 December 2019 GST will be charged to consumers on their online shopping from overseas suppliers, levelling the bar for NZ businesses who are required to be GST registered if they have turnover of $60,000 per year or more.

These changes mean overseas businesses supplying low-value goods to consumers in New Zealand must charge GST at the point of sale if they meet the GST registration requirements including a NZ$60,000 turnover threshold.

These changes apply to:

  • merchants (or retailers) who sell goods directly to New Zealand consumers (either online, by mail order or phone)
  • online marketplaces merchants sell goods and services through e.g. Etsy or Amazon
  • re-deliverers that offer mailbox redelivery and personal shopping services from other countries.

What are low-value goods?

Low-value goods are physical goods valued at NZ$1,000 or less (excluding GST). They include books, clothing, cosmetics, shoes, sporting equipment and electronic items.

Goods sold for more than NZ$1,000 will continue to be taxed by Customs at the border as they come into New Zealand.

What does this mean for New Zealand GST Registered businesses buying supplies from overseas?

Business to business supplies are generally excluded from these rules. In limited circumstances, overseas suppliers may collect and return GST on these sales.

You will need to provide the overseas supplier your GST number, New Zealand Business Number or inform them that you’re a GST-registered business.

If you import goods valued above NZ$1,000 you’ll continue to pay Customs GST and duty on these goods at the border.

What does this mean for New Zealand Non-GST Registered businesses buying supplies from overseas? 

If your business is not registered for GST or the goods are not for business use, then GST should apply at the point of sale. 

Maybe now’s the time to stock up on your overseas supplies prior to GST being charged from 1 December. Remember to keep in mind the current customs GST threshold of approximately $225NZD.

To find out more, check out Customs NZ

If you want to discuss your GST obligations in further detail, please contact us!