GST, goods and services pictureAs mentioned in our Taxing Matters: August 2019 article, new GST rules for low-value imported goods have come into effect from 1st December 2019.

From 1st December 2019 onwards, overseas suppliers of goods are required to charge GST on their supplies to New Zealand customers.

These rules apply where the value of the goods (excluding GST) is NZ$1,000 or less, known as “distantly taxable goods” (DTG), or sometimes known as “low value goods” (LVG). The New Zealand Customs Service will continue to levy GST on the higher value goods as the goods cross the border into New Zealand.

An overseas supplier of Distantly Taxable Goods is not required to charge GST where the purchaser of the goods is a GST-registered business that will be using the goods in its GST-taxable activity. However, the supplier will need proof of this before they can avoid charging GST. This can be done by letting the overseas supplier know your GST registration number or your New Zealand Business Number (NZBN) at the time your business makes the online purchase of the goods.

Overseas suppliers are also required to provide their New Zealand customers with prescribed documentation (GST receipt) to evidence that GST has been paid on the goods. This is designed to avoid double taxation where the Customs Service might be wanting to also charge GST on the goods.

The overseas suppliers of DTG must be registered for GST under the new rules before 1st December 2019 where the value of their annual supplies to end consumers within New Zealand are expected to exceed NZ$60,000.