Do you need to be GST registered? Will your marketplace operator automatically attend to the GST on your behalf?
Do you need to register for GST?
If you are not registered for GST, you will need to register if you have earned, or will earn more than $60,000 from all your taxable activities in any 12-month period. This includes sales provided directly to customers (for example through your own website) or made through an online marketplace.
You may also register voluntarily if you earn less than this.
It is important to tell your online marketplace if your GST registration status changes.
How are drivers, deliverers and accommodation hosts affected?
If you are GST-registered, from 1 April 2024 you will need to treat the supply of listed services sold through online marketplaces as a zero-rated supply on your GST return. You can continue to claim GST on the costs you incur in making these supplies.
If you are not GST-registered, from 1 April 2024 the platform (i.e. Air BnB) will collect GST at the standard 15% rate on listed services that are performed, provided or received in New Zealand. They will pass on 8.5% to the provider of the accommodation who are not GST registered and pay the remaining 6.5% to the IRD. The 8.5% passed on to unregistered sellers recognises the GST on their costs from supplying listed services.
The GST income portion received is not taxable income for income tax purposes. Therefore, if you are using Xero or MYOB, you will need to split your transaction between the two codes. If you are not using any online software, please let us know at the end of the financial year, the amount of GST received from the online platforms.
Need assistance with establishing how your business fits into the new rules? Please phone our office on 09 4353426 and make a time to meet with one of our team