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New Zealand residents trading over the internet

Explores the Australian tax obligations you face if you are a New Zealand resident entity that trades over the internet.

Last updated 16 July 2020

New Zealand resident entities that trade over the internet with customers in Australia may need to pay tax.

What taxes might I have to pay?

  • If you are a New Zealand resident entity that trades over the internet with customers in Australia, you will generally:
  • not be liable to pay Australian income tax – income tax only applies if you have a permanent establishment in Australia
  • not have to pay goods and services tax (GST) or register for GST - but we have outlined some exceptions below
  • not be liable to Australian capital gains tax (CGT) – CGT only applies to taxable Australian property
  • not have any Australian superannuation obligations or fringe benefits tax (FBT) obligations - unless you are employing workers in Australia.

See also:

When is GST payable?

GST is payable on taxable supplies.

The supply of goods from a NZ entity to someone in Australia is a taxable supply if:

  • the NZ entity supplies the goods in exchange for payment
  • the supply is made in the course or furtherance of an enterprise that the NZ entity carries on
  • the supply is connected with Australia
  • the NZ entity is registered or required to be registered for GST, and
  • the supply is not GST-free or input taxed.

A supply of anything, other than goods or real property, which is not connected with Australia may, in certain circumstances, be deemed a taxable supply. This is the case if:

  • the recipient of the supply acquires the thing solely or partly for the purpose of an enterprise that the recipient carries on in Australia but the acquisition is not solely for a creditable purpose
  • the supply to the recipient is for payment
  • the recipient is registered, or required to be registered, for GST in Australia, and
  • the supply is not GST-free or input taxed.

See also:

  • GSTR 2003/8 on characterisation of supplies made in relation to rights and other supplies
  • GSTR 2017/1 Goods and services tax: making cross-border supplies to Australian consumers
  • GSTR 2018/2 Goods and services tax: supplies of goods connected with the indirect tax zone (Australia)
  • GSTR 2019/1 Goods and services tax: supply of anything other than goods or real property connected with the indirect tax zone (Australia)
  • LCR 2017/1 Superannuation reform: capped defined benefit income streams - pensions or annuities paid from non-commutable, life expectancy or market linked products
  • LCR 2018/2 GST on supplies made through electronic distribution platforms
  • LCR 2018/3 When is a redeliverer responsible for GST on a supply of low value imported goods?

Registering for GST

The NZ entity must register for GST in Australia if:

  • it carries on an enterprise, and
  • its GST turnover from supplies that are connected with Australia meets or exceeds the registration turnover threshold of $A75,000 (or $A150,000, for a non-profit body).

See also:

Still confused?

If you are still not sure if you need to pay GST, you may wish to apply for a GST private ruling from us. We do not charge for providing GST private rulings.