New Zealand GST on e-services

New Zealand imposed its Goods & Services Tax (GST) consumption tax on non-resident providers of electronic services in October 2016.

Digital services subject to GST

The following services are liable to GST:

Streaming video, movies, music and gaming
Software
E-books
Apps
Online webinars
E-learning, including webinars
Remote gambling
Subscriptions to online membership clubs
Subscriptions to online journals
Automated insurance

Determining place of supply

Providers may use a variety of pieces of evidence to determine if their customers are New Zealand residents, and therefore liable to GST, including:

Billing address
IP address
Bank account address
International dialling code
Fixed telephone line address

GST registration

Foreign providers are liable to register for GST in New Zealand if their local sales surpass the registration threshold of NZ$ 60,000 in a year. Registrations may be sent directly to the local tax authorities, and there is no obligation to appoint a local representative.

If the services are provided through online marketplaces, where the marketplace is responsible for charging for the services, the provider can rely on the marketplace to charge and remit any GST.

GST compliance

Providers are not required to supply New Zealand customers with GST invoices. B2B transactions are the exception.

GST returns may be completed on a six-monthly basis. They are filed online at the tax authority’s portal. These returns are simplified, and do not allow for the reclaim of any input GST incurred.

They should be submitted by the 28th of the month following the reporting period.

B2B supplies of e-services

Where the customer is a New Zealand GST registered resident, no GST is due. Instead, the customer accounts for the tax in their GST return via the ‘reverse charge’ mechanism. The provider will have to seek proof that their customer is a tax payer. There is a fine for the resident New Zealand customer of NZ$ 50,000 if they continually attempt to represent themselves as a GST-payer.

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