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Internet purchasing and GST

If you are in NZ and order stuff via the internet from an overseas supplier there could be GST costs.

My experience is that in most cases the actual sale price from the overseas supplier will not be subject to NZ GST.

However, when the product arrives in NZ you might have to pay GST to the Customs Department. All imports are levied with GST when they arrive unless an exemption applies.

There are some exemptions and the one used the most for internet retail sales is an exemption from customs duty (which includes customs GST) if the total amount of duty and GST payable would be $50 or less.

So, as an example, if we assume the only duty payable on the item is GST then you can import it if the purchase price was $400 or less, i.e. the GST component of a $400 item is $50 so it falls within the exemption.

BUT, that number will change after 1 October 2010 when the NZ GST rate increases to 15%. From that date, if the item is only subject to GST (because no other customs duty applies) then you will only be able to import exempt of GST if it cost you $333 or less.

This is of course unless the government decides to increase the exempt threshold of $50 which currently applies to low value imports. At the moment I’m not aware of any statements about this but I believe it is under consideration.

It is more complicated if the item you import is also subject to other customs duties so you need to be careful.

Iain

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