On 7 July 2019, we reported here, that the New Zealand Parliament finally enacted legislation removing the GST exemption to import VAT for low value goods (now recharacterised as “distantly taxable goods” or “DTGs). DTGs are generally defined as goods that:
- Individually have a value of NZ$1,000 or less;
- Are outside New Zealand at the time of supply;
- Are supplied by a non-resident; and
- Are delivered to New Zealand
As a result of the removal of the low value GST exemption, non-resident sellers of those DTGs will need to register and account for GST on the supplies they make.
The Inland Revenue in New Zealand issued a report providing detailed guidance on the new legislation, coming into force on 1 December 2019. The new legislation is broadly the same as that applied to the supplies of remote services that was enacted in October 2016 which, similarly to the new law, will only affect B2C supplies.
If you are either:
- A non-resident merchant
- Operator of an electronic marketplaces
- A redeliverer (someone who assists a merchant with the delivery of goods to New Zealand)
- You are importing goods valued at or below NZ$1,000; and
- You expect the total value of your supplies to exceed NZ$60,000 over a 12 month period
Then it is likely that you’ll need to register and return GST on these supplies.
The new rules are in effect from 1 December, however, non-residents suppliers can register from 1 September 2019. If you think you’ll be affected by these new rules then get in contact with our VAT experts who be able to assist with these changes to your business.