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
- 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
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.
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.