GST Direct: Issue 31

Bringing you the latest GST and Customs developments

In this issue:

GST on services performed for non-residents in connection with land

Services supplied to non-residents are usually zero-rated. However, services supplied to non-residents that are “directly in connection with” land in New Zealand are subject to GST at 15%. This rule applies to physical services that directly impact the land, such as property maintenance.

CZR case heading to Court of Appeal

In a recent compulsory zero-rating (CZR) case - Wang and Zhang v Y&P New Zealand Limited (High Court 21 December 2016) - the purchaser argued that no written statement is required to support CZR whereas the vendor contended that a written statement had to be produced otherwise 15% GST would apply. Sargisson AJ held that no written statement is required so long as the CZR criteria in section 11(1)(mb) of the GST Act (sale of land) are met on the facts.

Australia to impose GST on low value goods imports

In February 2017, the Australian Government introduced the Treasury Laws Amendment (GST Low Value Goods) Bill 2017 (Low Value Goods Bill) into Parliament. The Bill intends to apply GST on the sale of low value goods into Australia from 1 July 2017. Once enacted, non-resident retailers and platforms will be required to register and account for GST on sales of goods under a “vendor registration model”. New Zealand businesses that sell low value goods to Australian consumers (as defined) may be required to register and return Australian GST.

Update on the Customs and Excise Bill 2016

During 2013 - 2016, the Government undertook a major review of the current Customs and Excise Act 1996 with the intention of creating new Customs legislation that is less prescriptive and more business friendly.

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