Guide to New Import GST Rules for Online Shopping

4-minute read


  • New GST Rules On Low Value Imported Goods 
  • Tips On Online Shopping for Christmas


Reporter:  There is going to be a significant change for online shoppers in New Zealand, just in time for Christmas. 

Updates to GST for “low value imported goods” have been introduced. The new rules say that if you buy something under $1000 from the 1st of December, there will be no import duty, but GST will be added to the value of the goods. 

Olivia Wannan is a researcher for the Consumer magazine. She joins me now from the Wellington studio to explain what the GST added change means. Hi, Olivia!

Olivia:  Hi, how is it going?

Reporter:  This is a big date for shoppers for Christmas, isn’t it, December the 1st? What difference is this going to make for people buying things online from overseas?

Olivia:  The government is asking overseas retailers to start charging GST on all items under $1000 on that date forward. 

Reporter:  At the moment, anything over $400 attracts import duty, but not GST. 

Olivia:  There is a bit of a gray area, depending on what the product is. If there are higher rates of duties on something, it might go down to about $225. 

For example, if you buy shoes of about $300, you will get a little bill; but if you bought a handbag for the same price, you wouldn’t get a bill. It’s a bit complicated.

Reporter:  Right. Let’s make sure that we’re clear on this. From the 1st of December, if you buy something that is with any amount of money, it is going to have GST attached to it.

Olivia:  Basically, yes. At some point, you will pay GST on it.

Reporter:  When you say ‘‘at some point’’, what do you mean by that?

Olivia:  What is going to happen is either retailer will charge it, or customs will stop it at the border and charge GST. Expect to pay GST on any order from December the 1st onwards.

Reporter:  When charging GST on overseas goods was first discussed, the retailers internationally wouldn’t have to wave at all to charge that money and direct it back to New Zealand. I assume this is going to happen at the border.

Olivia:  No. The government is asking retailers to do it themselves, to put the GST on orders. Buyers will pay it when paying for shoes or a handbag or whatever. They will collect all that money together and then send it to New Zealand. 

Luckily, Australia has introduced a policy similar to this. Hopefully, retailers are slightly more used to doing this type of thing now.

Reporter:  I wonder if that will stop opportunities for international sales? In terms of some retailers saying, “I don’t want to collect the GST of 15%”.

Olivia:  I’m not sure about that. The government has decided to give small businesses a bit of a pause.

Unless you make more than $60.000 from Kiwi consumers in a year, you don’t have to take on this honors board. It will just probably be the big things like the Amazons and the e-Bays.

Reporter:  What advice do you have for people shopping online from overseas sellers? We’re on the 21st of November. We don’t have long.

Olivia:  No. One interesting thing is that the government decided to add the GST at the same time they drop duties on any orders valued under $1001.

There is a point in time, at which some orders will become more expensive, while others will become less expensive because you won’t have to pay duties on them.

I have a couple of tips around the best time to place an order this Christmas. There isn’t much time left in November. If you do have your eye on something costing around $225 or less, you’ll pay no tax if you purchase it in November.

But if you wait until December, you will suddenly notice that you’re paying 15% more. On the other hand, if your order is between $400 and $1000, then, normally, you will pay duties on that.

It is best for you to wait until December to purchase that. It’s going to come through, and it’s going to be faster, customs won’t work on those duties. Your order overall will be cheaper. 

Guide to New Import GST Rules for Online Shopping_1


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