Starting from 1 April 2024, if you perform or provide certain services in New Zealand using an online marketplace—like a website or app—the online marketplace will be responsible for collecting and returning GST on your sales. It's essential to know if you are using an online marketplace, so check with them if you're unsure. These GST changes do not apply to services not facilitated through an online marketplace.
What Services Are Affected?
The services impacted by these new GST rules include:
Ride-sharing
Food and beverage delivery
Short-stay and visitor accommodation
Key Requirements for Service Providers
If you offer any of the listed services, you need to provide your online marketplace operator with the following:
Your name
Your IRD number
Your GST registration status
It's crucial to inform your online marketplace if you're GST-registered. If you fail to do so, they may assume you are not GST-registered. Additionally, keep them updated on any changes to your GST registration status.
Non-GST-Registered Providers: Flat-rate Credit Scheme
For those not GST-registered, the online marketplace will collect GST at the standard rate of 15% on the services you provide in New Zealand. They will then:
Pay 6.5% to the government
Pass 8.5% on to you
This 8.5% flat-rate credit is for you to keep, compensating for the GST on your supply costs.
GST-Registered Providers
If you are GST-registered, you must treat the services sold through a GST-registered online marketplace as zero-rated supplies in your GST return. This allows you to claim GST on the costs of providing these services.
For services provided outside of an online marketplace, standard GST rules apply, and you must pay GST on these services.
Important: If you receive a flat-rate credit while GST-registered, you need to return it by making a debit adjustment in your GST return. Failure to do so can result in penalties.
You also need to generally return GST on sales of motor vehicles and property used to provide listed services, although there are exceptions where you can treat these as non-taxable supplies. For more details, refer to the GST adjustments page.
Opt-Out Rules for Large Accommodation Hosts
Large accommodation hosts meeting specific criteria can opt out of the marketplace GST rules and remain responsible for their GST obligations:
Supplies exceeding $500,000 in a 12-month period, and being a non-individual entity
Meeting a 2,000-night threshold for accommodations listed through a single online marketplace
To opt-out, you must inform your marketplace operator if you meet the $500,000 threshold. If you meet the 2,000-night threshold, you need to enter into a written agreement with the marketplace operator, affirming your responsibility for GST obligations.
Transitional Rule for Pre-1 April Bookings
For bookings made before 1 April 2024, marketplace operators and listing intermediaries (like property managers) do not have to apply the new GST rules.
If you're GST-registered and informed that the transitional rule applies, you need to collect and pay GST under the normal rules for these bookings. If you're not GST-registered, you don't need to take any action, but note that you won't receive flat-rate credits for these bookings.
Conclusion
These changes aim to streamline GST collection and compliance for services provided through online marketplaces. Ensure you understand how these rules apply to your specific situation and stay compliant to avoid penalties. If in doubt, consult with your online marketplace operator or a tax professional.
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