Tax Tips Alert: New Zealand's new GST collection model for low value imported goods

The Government has introduced draft legislation that will require certain offshore suppliers to register, collect, and return GST at 15% on goods valued at or below $1,000 sold to private consumers in New Zealand. Once enacted, the new rules will apply from 1 October 2019.

The proposed rules:

• will apply when the item of goods (below the entry threshold of $1,000) is outside New Zealand at the time of supply and is delivered to a New Zealand address.
  
• will require offshore suppliers to register when their total taxable supplies of goods and services to New Zealand exceed $60,000 in a 12-month period.
  
• will also require electronic marketplaces (including New Zealand resident marketplaces) and re-deliverers to register in certain circumstances.
  
• will remove tariffs and border cost recovery charges from imported consignments valued at or below $1,000.

In our latest Tax Tips Alert, we discuss in more detail the key features of the proposed changes and what they mean for New Zealand consumers, New Zealand GST-registered businesses, and offshore suppliers with sales exceeding the registration threshold. We also provide a roadmap to readiness that summarises the trajectory of the changes and what needs to be considered in order to comply with the new rules.