GST Net Expanded to Catch Online Small Goods

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A new Bill called the “GST Offshore Supplier Registration and Remedial Matters” bill is set to introduce new rules to capture GST from goods worth less than $1,001. This will be done by obliging overseas companies which sell goods online that have sales of more than $60,000 (the normal GST threshold) to register for GST and charge GST on any goods less than $1,000 that are sold (including shipping and insurance). This does not include however any B2B (Business to Business) sales, however the purchaser in this case must supplier their GST number as proof they are in business. The overseas company may also claim GST on any expenses it now incurs as well – accounting fees etc. 

The normal rules for goods sold worth more than $1,000 will still apply – Customs will charge GST at the border. Additionally Customs can charge GST on goods worth less than $1,000 if GST has incorrectly not been charged by the overseas company. 

The new rules are set to kick in on the 1st of October 2019. These rules will also apply to Re-delivery services which can be used as a work around when a website does not offer shipping to new Zealand. Sellers will be required to prepare quarterly GST returns and can elect an agent in new Zealand to remit the GST.

Joanne Whyte