New Zealand GST on digital services 2016

Sun 15th May 2016

The New Zealand parliament has passed the bill to impose 15% GST on e-services provided to consumers from foreign providers. The new tax will come into force on 1 October 2016.

Sellers can use information such as IP address and credit card details may be used to determine if a consumer is resident in New Zealand and resident for GST purposes.

Digital services

The services affected include:

  • Streaming video, movies, music and gaming
  • Software
  • E-books
  • Online webinars
  • E-learning
  • Subscriptions to online membership clubs
  • Subscriptions to online journals

There is a GST registration threshold of NZ$ 60,000 per annum. Any supplies made via an online marketplace who becomes the seller of record will make the marketplace liable for accounting for the indirect tax.

B2B supplies

The new measures are aimed at targeting B2C services. Supplies to businesses can use the reverse charge mechanism to zero rate the supply for GST.