Posted on 25-Dec-2019

PCANZ Accountants Limited

GST on online shopping

The new rule for charging GST on low value goods (valued at or below $1,000) was effective on and from 1 December 2019.

Key changes made:

1. Most overseas businesses that sell goods to New Zealanders are required to charge GST on products valued at $1000 or less
2. Tariff duties and cost recovery charges will not apply to most orders under $1001
3. Purchasing under $400 will in general be more expensive, while purchasing between $400 to $1,000 will generally pay less

Here is a comparison of the old rule with the current rule:

Current Rule:

Value less than $60: 15% GST
Value between $60 and $400 15% GST
Value between $400 to $1,000 15% GST
Value over $1,000 15% GST + Tariff Duty + Board processing fee

Old Rule:

Value less than $60: No charges apply

Value between $60 and $400 no GST and other costs, or it might trigger 15% GST + Tariff Duty + Board processing fee, depending on different type goods.

Value between $400 to $1,000 15% GST + Tariff Duty + Board processing fee

Value over $1,000 15% GST + Tariff Duty + Board processing fee

Requirements:

Overseas businesses, online marketplaces and redeliverers need to register for GST when the total supplies to New Zealanders either were $60,000 more in the last 12 months, or will exceed $60,000 in the next 12 months.

If you have any queries, please contact us.
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