Buying from overseas? GST now on low value imported goods

Date: 12th January 2020

Dubbed ‘Amazon tax’, a new law introducing GST on low value imported goods came into effect on 1 December 2019. Now overseas businesses that sell low-value goods to consumers in New Zealand may need to register for, collect and return GST of 15%.

Any item costing $1000 or less will be a low value import and the GST will be collected by the supplier, provided the total supplies to this country amount to $60,000 or more per annum. There will, of course, be suppliers who are not registered for GST, particularly those whose sales to this country are less than $60,000 per year.

online shopping

Does your business deal with overseas suppliers? Read on!

How will it affect NZ GST-registered businesses?

If you are buying low-value goods sold from overseas suppliers as a GST-registered business for use in your business (business-to-business supplies), GST is generally excluded under the new rules. That’s because businesses can claim back GST on these purchases, so Inland Revenue would just end up paying back any GST that had been collected.

However, some suppliers may opt to collect GST on low-value goods supplied to GST-registered New Zealand businesses if they meet the criteria that allows this. They must issue a tax invoice which will allow the New Zealand business to claim back the GST.

If a New Zealand business imports goods in a consignment valued above NZ$1,000 from an overseas supplier, they’ll continue to pay GST and duty on these goods at the border.

However, Customs will not collect GST on low-value goods in parcels or consignments valued over NZ$1,000 if it receives documentation that shows GST has already been collected by an overseas supplier, marketplace or re-deliverer.

What you need to do

If you deal with overseas supplier, be sure to let them know that you are GST registered. For business to business transactions, an overseas supplier can zero rate your purchase.

If you are charged GST in error, you have two options:

  • Get the GST back from the supplier.
  • Get the supplier to send you a tax invoice so you can claim the GST back.

Remote services

This new law is in addition to the regulations that came in 2016. Remember the so-called ‘Netflix tax’? This introduced the collection of GST on remote services including online services and digital products bought from overseas, such as software downloads, streamed movies and music.

More information

GST to be charged on low value imported goods

More info for businesses from Inland Revenue

More info for consumers from consumer.org



Posted in: Latest News, tax, Wanaka