Charging NZ GST to client based in AU?

Forums › Off topic › Charging NZ GST to client based in AU?

snowfly

327 posts

Ultimate Geek
+1 received by user: 37

Topic # 196122 20-May-2016 09:50

We use Xero, and before I reach out to our accountant (as can be a delay), thought I would see if anyone here can clarify.

Got a client who lives in Aus, with Aus address, but I provide an IT service to them based in NZ (e.g. hosted on hardware in NZ), should I be charging this client GST, or would GST be zero-rated? (as their billing address is outside NZ). Or would all NZ based services be liable for GST?

A second client I do work for is more clear cut, as I provide an exported 'service' to them (e.g. develop code), and they use this service in AU, meaning GST is zero-rated, according to IRD site.

But I couldn't quite find the direct answer for the first client, based on IRD site.

Thanks

marlinz

443 posts

Ultimate Geek
+1 received by user: 102

Reply # 1555997 20-May-2016 10:01

I am no expert , but would asssume if they goods or servives are used in NZ they pay the GST here , our everyone would just get an overseas address to be billed to

richms

21287 posts

Uber Geek
+1 received by user: 4296

Trusted

Subscriber

Reply # 1556007 20-May-2016 10:10

I dont pay VAT on my seedbox because I have a non EU billing address, but I expect that the "netflix tax" carryon will have something to say about it soon so accountant would be the best bet

Richard rich.ms

snowfly

327 posts

Ultimate Geek
+1 received by user: 37

Reply # 1556017 20-May-2016 10:18

marlinz:

I am no expert , but would asssume if they goods or servives are used in NZ they pay the GST here , our everyone would just get an overseas address to be billed to

This is what I expected. Will see if the accountant backs this up.

Geektastic

11683 posts

Uber Geek
+1 received by user: 3783

Trusted

Lifetime subscriber

Reply # 1556068 20-May-2016 10:57

I had the reverse - paid fees to attend a trade event in Australia, billed by the Australian part of Tourism New Zealand in NZ dollars but had to pay Australian GST which we could not reclaim....

mdooher

Hmm, what to write...
988 posts

Ultimate Geek
+1 received by user: 498

Trusted

Lifetime subscriber

Reply # 1556188 20-May-2016 12:33

This is the reason you should never let your staff book their New Zealand accommodation through an offshore website...you wont be able to claim the GST.. because they don't charge it

Matthew

alasta

4003 posts

Uber Geek
+1 received by user: 695

Trusted

Subscriber

Reply # 1556513 20-May-2016 19:50

I had to get some professional advice on this many years ago when I worked for a large domain registration and hosting company with an office in NZ.

If I recall correctly the tax advisor told me that the services would generally be deemed to have been 'consumed' within NZ jurisdiction and therefore GST was payable. Some customers disputed this and I was subsequently advised that we could apply to get a binding ruling from IRD to get the GST exempted for overseas based customers, however we didn't pursue this as it wasn't worth the cost or hassle.

Kyanar

3019 posts

Uber Geek
+1 received by user: 462

Trusted

Subscriber

Reply # 1556955 21-May-2016 19:37

Depends what the service is. If it's SaaS, the answer is clear: GST is not applicable. If you're providing hosting services, it probably gets hairy.

Refer: http://www.ird.govt.nz/ecommerce-tax/ecommerce-gst/business-australian-ecommerce-gst.html#03

"Software and other similar digital products imported over the internet are treated as services as the definition of "goods" in the GST Act explicitly excludes products that are "transmitted by a non resident to a resident by means of wire, cable, radio, optical or other electromagnetic system or by means of a similar technical system""

So it's definitely a service. And when the service is actually used overseas, GST isn't payable.