Tax Facts
GST & E-Commerce
Sale of Physical Goods via
the Internet
If a GST-registered person sells goods
via the internet and the goods are physically supplied
to a customer in New Zealand, GST is chargeable at 12.5%.
If goods are sold via the internet and physically supplied
to customers overseas the sales can be zero-rated for
GST purposes. It is important to prove the goods have
been exported (entered for export by the supplier) and
sufficient evidence should be held to prove the export.
Sale of Digital Goods via the Internet
If a GST-registered person sells digital
products via the internet which are downloaded such
as music, software or digital books, to a New Zealand
customer they must charge 12.5% GST. (These products
are treated as services for GST purposes).
If digital products are sold via the internet and downloaded
by an overseas customer they can be zero-rated but it
is important to prove that the products are "exported"
otherwise GST must be charged.
Evidence required to prove
products are exported
Scenario 1:
Physical goods are exported overseas
by the supplier. The customer is located overseas.
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Delivery evidence, for example, bill of lading
showing export by sea, air waybill for export via
air, packing list or delivery note showing overseas
delivery address, insurance documents. |
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Purchase order showing overseas delivery address.
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Scenario 2:
Physical goods are exported overseas
by the supplier. The customer is located in New Zealand
at the time of purchase.
|
Delivery evidence, for example,
bill of lading showing export by sea, air waybill
for export via air, packing list or delivery note
showing overseas delivery address, insurance documents. |
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Purchase order showing overseas delivery address.
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Scenario 3:
Digital products are downloaded by
a customer who is located overseas.
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The customer should make
a declaration at the time of the transaction that
they are located overseas and that the products
will be used outside New Zealand. For example,
"I declare that I am not in New Zealand at
this time and will not be making use of this supply
in New Zealand" and provide their name and
full address. |
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Evidence of payment received
from overseas customer. Credit card information
may be a guide as certain credit card number series
may only be issued in New Zealand. However, this
process is changing and is not entirely reliable.
|
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Email address may suggest
that the customer is overseas but is not final
proof as a New Zealand resident can obtain an
overseas email address. |
|
Internet Protocol (IP) address
of the customer - although this is not final proof
that the customer is overseas. |
Note: In this scenario, as can be seen
from the above list, it is unlikely that only one form
of information will prove that the customer is overseas.
It is expected that a reasonable attempt would be made
to confirm the customer is overseas to support zero-rating.
For more information refer to the E-Commerce
and GST section on the IRD website.
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