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Inland Revenue

Tax Policy

Chapter 4 - Registration requirements and returns filing

  • All offshore suppliers supplying a total value of goods and services to New Zealand consumers above $60,000 in a 12-month period would be required to register.
  • Online marketplaces and re-deliverers would be required to register and return GST if they meet the registration threshold.
  • Business-to-business supplies would not count towards an offshore supplier’s total supplies unless the supplier chose to zero-rate these supplies.
  • A simplified “pay only” registration system will be available to offshore suppliers.
  • Quarterly filing is proposed for offshore suppliers of low-value goods.

4.1 This chapter discusses the proposed registration threshold that could be applied to offshore suppliers, and situations when an electronic marketplace or a re-deliverer might be required to register instead of the principal supplier.

Registration threshold for offshore suppliers – $60,000

4.2 Currently, domestic businesses and offshore suppliers of cross-border services are required to register for, collect and return GST if their total New Zealand supplies exceed, or are reasonably expected to exceed, $60,000 in a 12-month period. They are also able to voluntarily register if their turnover falls below that amount.

4.3 While the registration threshold might be considered an exception to New Zealand’s broad-based GST policy, as some suppliers would not be required to register and return GST, it is intended to reduce compliance costs for very small businesses. For the same reason, a similar registration threshold is proposed for offshore suppliers of low-value goods.

4.4 For some suppliers, the compliance costs of registering and returning GST may outweigh the revenue collected in supplying low-value goods to New Zealand customers. As far as possible any new rules should be designed in a way that does not pose a barrier to trade with New Zealand as this could reduce market competition and consumer choice.

4.5 Countries that have introduced offshore supplier registration systems for services and intangibles have typically adopted low or nil thresholds. However, similarly to New Zealand, Australia has a registration threshold for offshore supplies of cross-border services and intangibles that is the same as the domestic registration threshold of AU$75,000. This registration threshold will also apply to offshore suppliers of low-value goods to Australian consumers from 1 July 2018.

4.6 The Government considers that applying the existing $60,000 registration threshold, which applies to domestic suppliers and offshore suppliers of cross-border services, is most appropriate. This would ensure that offshore and domestic suppliers making a similar level of supplies in New Zealand would receive comparable treatment. Although, it is acknowledged that with the exclusion of business-to-business supplies, for some offshore suppliers, the registration threshold could in practice be higher than the domestic one. It would also mean the compliance burden associated with the requirement to register and file returns is not imposed on smaller suppliers to the New Zealand market, which could otherwise pose a barrier to trade with New Zealand and could reduce market competition and consumer choice.

Example 11: Supplier below the registration threshold

Ryan buys $200 worth of mobile phone accessories from a website called Dalen’s Designs, a small boutique store in Utah that sells individualised mobile phone covers. Dalen’s Designs does not make $60,000 worth of supplies to New Zealand a year. Under the new rules it would not be required to register for, collect or return New Zealand GST.

Special rules for marketplaces and re-deliverers


4.7 The Government is proposing to extend the electronic marketplace rules that apply to cross-border services to supplies of low-value goods. In some instances, offshore suppliers would not directly supply goods to their customers. Instead they may use an online marketplace, such as a website or internet portal, to market and sell their products. It is proposed that the marketplace would be treated as the supplier and be required to register.

4.8 The marketplace is generally in a better position to register and return GST on supplies compared with the underlying supplier. Typically, the marketplace would be larger and better resourced and may have a closer relationship with the customer. Requiring the marketplace to register may also reduce compliance costs, as a potentially large number of smaller suppliers may not be required to register. It is anticipated that the marketplace and the underlying supplier will have commercial arrangements in place that could take any GST costs into account.

4.9 To ensure these rules can be easily applied in practice, it is important to clearly define the circumstances in which the marketplace would be required to register, and therefore, the underlying supplier would not be required to register. Without this clarity there is a risk that both parties may register or fail to register.

4.10 It is proposed that a marketplace would be required to register when customers would normally consider the marketplace to be the supplier, and this is reflected in the contractual arrangements between the parties. This is likely to be when the marketplace:

  • authorises the charge to the customer;
  • authorises delivery of the goods to the customer; or
  • sets any of the terms and conditions of the transaction.

4.11 It would be expected that an offshore supplier simply using a payment service provider to organise the payment from the customer would still be required to register. In this situation, the payment service provider would have a limited role in the supply chain. However, if for example an offshore supplier listed goods on a third-party website, and that website interacted directly with the customer and organised payment and delivery for any purchases, that website would be required to register, charge and return GST instead of the underlying supplier.

4.12 Underlying suppliers would still be required to register for supplies to New Zealand residents not connected with the marketplace.

4.13 The proposal to require marketplaces to register for GST means that supplies of low-value goods made by smaller suppliers to New Zealand consumers through the marketplace would be subject to GST. It is acknowledged that in the absence of marketplace rules, supplies of low-value goods by these smaller suppliers would not be subject to GST because the total value of their supplies to New Zealand consumers would fall below the GST registration threshold. While the purpose of the registration threshold is to reduce compliance costs for suppliers that do not supply many goods and services to New Zealand consumers, the compliance costs for these smaller suppliers fall away when the requirement to register and return GST is shifted to the marketplace.

Example 12: Marketplace with supplies over $60,000 a year

Anthony’s Accessories is a small store in England that sells mobile phone accessories. These phone accessories are also available to purchase online but only through the large online marketplace, E-Marketz.

An extensive range of goods and services are sold to consumers through the E-Marketz marketplace such as, physical books, e-books, CDs, DVDs, and digital music and movie files. The total value of low-value goods and services sold through E-Marketz’ platform to New Zealand consumers is well over $60,000 a year.

Consider Ryan in example 11. He now purchases $200 worth of phone accessories from Anthony’s Accessories through the E-Marketz website.

Under the proposals, E-Marketz would be treated as the supplier of goods to Ryan. E-Marketz is already registered for GST under New Zealand’s cross-border services rules. E-Marketz would now be required to collect and return GST on its supplies of low-value goods to New Zealand consumers.

4.14 Australia has similar GST rules for cross-border services supplied through electronic distribution platforms. These rules include the ability for platforms and underlying suppliers to agree that the underlying supplier is responsible for returning GST on the services supplied through the platform to Australian consumers. From 1 July 2018, these rules will also apply to goods sold through these platforms.

4.15 The Government is seeking feedback on whether, as a default rule, treating the marketplace as the supplier of the goods provided that any of the conditions in paragraph 4.10 are met is workable.


4.16 Re-deliverers are used by consumers when the supplier or marketplace does not offer shipping to New Zealand. The good is instead shipped to an overseas “hub” or mailbox, which then ships the good to New Zealand. Since the supplier or marketplace in this situation may not know that the final destination of the good is New Zealand, it would be unreasonable to require them to charge GST.

4.17 Re-deliverers will, however, know the final destination of the goods on which they are “redelivering”. They should also know the value of the goods to be redelivered to New Zealand, as the consumer is generally required to provide a value for their parcel as part of the arrangements with the re-deliverer for payment and delivery of the goods to New Zealand.

4.18 For these reasons, it is proposed that re-deliverers, rather than the underlying suppliers, be required to register and return GST, if their supplies to New Zealand are above the registration threshold. Requiring re-deliverers to collect and return GST instead of the underlying supplier or the marketplace recognises that when consumers engage the services of a re-deliverer to “redeliver” their goods to New Zealand, it is the re-deliverer who would be best placed to know the status of the goods and the location to which they being delivered.

Australia’s approach to re-deliverers

4.19 Under Australia’s rules for low-value imported goods, an entity is a re-deliverer if that entity arranges with the recipient consumer to:

  • provide for the use of an overseas mailbox to which the goods are delivered; or
  • purchases the goods (as an agent of the recipient consumer); and
  • delivers the goods to Australia.[23]

4.20 Consistent with Australia’s rules, it is also proposed that freight forwarders or transporters (such as courier companies) who bring goods to New Zealand for consumers would not fall within the scope of the proposed rules for re-deliverers, unless the functions they are performing for the consumer are more akin to those of a re-deliverer.

4.21 The Government is interested in feedback from re-deliverers on this measure, in particular, whether the Australian approach should be adopted in New Zealand. The Government would also be keen to understand any practical issues with this approach.

Example 13: Re-deliverer above the registration threshold

Marie lives in Wellington and is an avid purchaser of designer handbags. She wishes to order a $300 handbag by popular American designer, Babette Nordqvist. Unfortunately, Babette Nordqvist does not offer shipping to New Zealand. When Marie purchases the handbag from Babette Nordqvist, she requests that the bag is delivered to a US-based address provided to her by Ship2Me.

Ship2Me is an entity that provides its customers with a US postal address and then arranges with its customers to have their goods redelivered to New Zealand.

Marie arranges with Ship2Me to have her handbag delivered to her home address in Wellington.

Ship2Me’s supplies exceed the registration threshold. Under the proposed rules, it would be a re-deliverer and would be required to register for GST instead of Babette Nordqvist (the underlying supplier).

Simplified registration system

4.22 To ensure compliance costs are kept to a minimum, the Government proposes that a simplified “pay only” registration system be available to offshore suppliers of low-value goods. A pay-only registration system is tailored for offshore suppliers that have no GST to claim and make payments only. The main benefit of a pay-only system is that the system can be very simple.

4.23 Because offshore suppliers that are in a pay only position represent a low risk from a revenue perspective, the registration and filing requirements are significantly simplified. The usual checks and balances focussed on ensuring that input tax deductions or refund claims are correct can be relaxed.

4.24 Inland Revenue has already developed a system for offshore suppliers of cross-border services and it has been well received. The Government proposes to extend this system to offshore suppliers of low-value goods. Offshore suppliers that are already registered for GST under the cross-border services rules would not need to re-register for their supplies of low-value goods under the proposed new rules.

4.25 While it is expected that the majority of offshore suppliers would only need to register under a pay-only system (as they would not normally incur any New Zealand-based GST costs on their supplies of low-value goods to New Zealand consumers), the normal domestic registration system would also need to be available so that offshore suppliers who do wish to claim back any New Zealand GST they have incurred may do so. By international standards, New Zealand’s domestic registration system is considered to be very simple.

Filing periods

4.26 Currently, domestic suppliers must file GST returns on a one-monthly, two-monthly or six-monthly basis, depending on turnover level. However, during consultation for the GST rules on cross-border services, offshore suppliers expressed a preference for quarterly GST returns, to better align with their filing obligations in other countries.

4.27 Consequently, under New Zealand’s GST rules, quarterly returns are mandatory for offshore suppliers whose only New Zealand supplies consist of cross-border services. The Government proposes that this rule is extended to offshore suppliers of low-value goods.


[23] The entity would also be a re-deliverer if it procured, arranged or facilitated in these activities.