Could impact Australian business.
The New Zealand Government’s recently enacted GST legislation may impact Australian businesses. The new rules, which come into force from December 1, 2019, will require overseas businesses supplying more than $60,000 of low-value goods per year into New Zealand to pass on GST directly to Inland Revenue.
The legislation ensures offshore suppliers are on a level playing field with domestic retailers, New Zealand Revenue Minister, Stuart Nash said. “There are 26,000 small businesses in the retail sector employing more than 62,000 people that are required to collect GST on all sales. The same requirement will now apply to offshore retail giants.
“GST has always been payable on purchases from overseas but administration and collection costs have been prohibitive for customs. The GST on goods valued above $1000 will continue to be collected by customs at the border.
“The internet has opened up more markets for global companies but if they want to do business here they must follow the rules like everyone else. We’re not the first country to introduce such a rule and eventually this will be the new reality of doing business,” the minister said.
This new legislation is similar to GST rules on low-value goods that Australia applied from July 2018.
The new system to collect GST was due to take effect on October 1, 2019, however, the NZ Government agreed to the change so offshore businesses wanting to comply with the law would have time to adapt their IT and accounting systems.
It is estimated the tightening of the GST system will collect approximately $126 million in revenue per year by 2022/23.