GST Registration​

GST registration as a non-resident business supplying remote services

From 1 October 2016 if you're a non-resident business supplying remote services (including online services) you may be required to:

  • register for New Zealand GST, and
  • charge GST on services provided to customers resident in New Zealand.

 

You need to register for GST when:

  • you exceed the GST threshold, that is your sales:
    • exceed NZD $60,000 in the last 12 months, or
    • are expected to be more than NZD $60,000 in the next 12 months.
  • your customer is resident in New Zealand, and
  • you supply a qualifying remote service.

 

You can register for GST from 1 August 2016. The registration will take effect from 1 October 2016.

What a remote service is

A "remote" service is where, at the time of the performance of the service, there is no necessary connection between the physical location of the customer and the place where the services are performed.

Examples of qualifying remote services include:

  • supplies to digital content such as e-books, movies, TV shows, music and online newspaper subscriptions
  • online supplies of games, apps, software and software maintenance
  • webinars or distance learning courses
  • insurance services
  • gambling services
  • website design or publishing services
  • legal, accounting or consultancy services.

 

Examples of non-qualifying remote services include:

  • accommodation services
  • hairdressing, beauty therapy and physiotherapy
  • car rental services
  • entry to cinema, theatre performances, sports events and museums
  • gym membership
  • passenger transport services
  • restaurant and catering services.

 

Work out if your customer is resident in New Zealand

You'll need two pieces of evidence to identify if you're supplying services to a customer resident in New Zealand. These pieces of evidence must not contradict each other. They can include:

  • the customer's billing address
  • the internet protocol (IP) address of the customer's device or another geolocation method
  • details of the bank account the customer uses for payment, or the billing address held by the bank
  • mobile country code of the international mobile subscriber identity stored on the subscriber identity module card
  • where the customer's fixed land line is supplied
  • other relevant information.

 

New Zealand GST registered and non-GST registered customers

GST isn't charged on supplies you've sold to customers that are registered for GST in New Zealand. GST is charged to every customer unless they have:

  • indicated they're GST-registered, or
  • provided you with their New Zealand GST registration number or business number.

You can choose to treat the supply as zero-rated (taxed at a rate of zero percent). This may let you claim back New Zealand GST costs incurred in making zero-rated supplies to GST-registered businesses.

Tax invoices and refunds of accidentally charged GST

When you supply a remote service to a New Zealand customer you don't have to give them a tax invoice. Tax invoices are a standard requirement for New Zealand GST-registered businesses.

If you've accidentally charged GST to a GST registered customer, your customer may ask you to refund them that GST.

If the supply was NZD $1,000 or less you can choose to provide a tax invoice instead of a refund. Providing a tax invoice allows a GST-registered customer to claim back the GST in their own GST return.

Filing your GST return

You'll need to calculate your sales and income before you can work out your GST total.

If you registered as returning and claiming GST you'll also need to calculate your purchases and expenses.

If you've accidentally charged GST to a GST registered customer, your customer may ask you to refund them that GST.

If the supply was NZD $1,000 or less you can choose to provide a tax invoice instead of a refund. Providing a tax invoice allows a GST-registered customer to claim back the GST in their own GST return.

Filing your GST return

You'll need to calculate your sales and income before you can work out your GST total.

If you registered as returning and claiming GST you'll also need to calculate your purchases and expenses.

Filing your GST return from 1 April 2017

Effective 1 April 2017, all non-resident businesses that supply remote services will be required to file quarterly. The quarters end on:

  • 30 June
  • 30 September
  • 31 December
  • 31 March

 

You have until the 28th of the month following your  to file and pay any GST owing, eg, the June quarter GST payment and return are due 28 July. One of the exceptions to this is the return and payment for the March quarter - we allow until 7 May.

If you haven't had any sales in a period you must file a  otherwise you may be charged late filing penalties.

From 1 April 2017 a "pay-only" GST return will be available for non-resident suppliers that only return GST. This return will only include fields relevant to returning GST, such as the amount of:

  • supplies to customers resident in New Zealand, and
  • GST required to be paid.

 

If you return and claim GST you'll be required to file a full GST return.

You can claim any New Zealand GST you've been charged on expenses you've incurred. These are expenses that relate to your business of supplying remote services to New Zealand resident customers. This includes zero-rated supplies to GST-registered businesses.

Courtesy of IRD - Read the original article here