Tax rate by region New Zealand

Select region

The information provided on this page is intended for general informative purposes only. It should not be interpreted as tax advice, nor is it meant to be. For advice on your particular tax responsibilities, consult with an experienced tax expert. PayPro Global does not assume any responsibility for any action taken or not taken based on the information presented here.

Understanding SaaS Sales Tax in New Zealand: A Comprehensive Guide for Businesses

Navigating the complexities of taxes can be challenging, especially for businesses operating in the dynamic and international realm of SaaS. This guide aims to demystify the fundamentals of SaaS sales tax in New Zealand, equipping you with the knowledge and tools to ensure fiscal compliance and streamline your operations.

New Zealand operates under a Goods and Services Tax (GST) system, implemented in 1986. This comprehensive tax applies to most goods and services, including digital products like SaaS. The standard GST rate in New Zealand sits at 15%, and businesses are obligated to collect and remit this tax to the Inland Revenue Department (IRD). It’s crucial to note that there are no specific exemptions for digital goods or services, and compliance with GST regulations remains essential for businesses offering SaaS solutions in New Zealand.

Mosaic image

New Zealand

New Zealand adopted a Goods and Services Tax (GST) in 1986 to streamline taxation and improve compliance.

Official government link: Inland Revenue

15.00%

E-products and services VAT/Sales tax rate

Reduced tax rate product categories

No specific digital goods or services with reduced tax

Exempted product categories

No specific digital goods or services are exempt

Reverse charge mechanism for B2B sales

Yes

Tax ID validation required

Yes

When do you have to register

Once the threshold has been exceeded

Online registration possible

Yes

Local representative needed

No

Registration procedure

Check if you need to register based on your annual turnover or if you are a non-resident selling digital services or importing low-value goods.
Get an IRD number if you don’t have one.
Apply for GST registration online or by paper, providing business details and expected turnover.
Wait for approval and receive your GST number.
Once registered, charge 15% GST and claim back GST paid on business expenses.
File regular GST returns and make payments.

List of digital and electronic services liable for tax

Supplies to digital content such as e-books, movies, TV shows, music, and online newspaper subscriptions;
Online supplies of games, apps, software, and software maintenance;
Webinars or distance learning courses;
Insurance services;
Gambling services;
Website design or publishing services;
Legal, accounting, or consultancy services.

Penalties

In New Zealand, even if a foreign company hasn’t made any sales during a specific period, it’s still obligated to submit a “nil” return. Failing to do so could result in late filing penalties.

The specific penalty amount for late filing depends on the company’s net income:

Less than $100,000: $50 penalty
$100,000 to $1 million: $250 penalty
More than $1 million: $500 penalty

Registration threshold

NZD 60.000 

Filing interval

Quarterly

Filing deadline

By the 28th day of the month following the reporting period

E-invoicing requirements

Not mandatory

Record keeping

The following documents must be kept for 7 years:

Tax invoices you issue and receive
Credit notes and debit notes
Accounting records (e.g., general ledger, cash book, bank statements)
Records of goods and services you exported
Records of purchases from non-residents (if you’re using the reverse charge mechanism)
Records of GST you’ve paid on imported goods
Copies of all GST returns you’ve filed
Proof of payment for any GST you owe

How-To Guides: New Zealand SaaS VAT

Step: 1 Threshold

Effective October 1, 2016, New Zealand requires non-residents (including online platforms) providing remote services, including digital services, to consumers (B2C) in New Zealand to register for and collect GST if their sales exceed NZD 60,000 in a 12-month period.

Step: 2 Business Registration

Registration is managed by Inland Revenue (IRD). Non-residents providing “Remote Services” (SaaS) can use a simplified registration process that does not require a local entity or fiscal representative.

Step: 3 TIN/VAT Number

The IRD Number (or GST Number) is issued by Inland Revenue.

Step: 1 Standard GST Rate

The standard GST rate in New Zealand is 15%. 

Step: 2 GST Formula

To calculate your tax amount, use the following formula:

 

Tax Amount = Net Price x 15%

Step: 3 Reverse Charge (B2B)

It applies to B2B supplies. If the NZ buyer is GST-registered, the offshore supplier does not charge GST. The buyer accounts for the tax via the reverse charge mechanism.

Step: 1 Selling B2C

Offshore SaaS providers must charge 15% GST on sales to private consumers. You must determine residency using at least two non-conflicting pieces of evidence (e.g., billing address, IP address, bank details).

Step: 2 Selling B2B

Zero-rated/No GST charged. You must obtain the buyer’s GST number or a declaration of their GST status. If the buyer is not registered, treat the sale as B2C.

Step: 3 Invoice Requirements

Since April 2023, NZ uses “Taxable Supply Information” (TSI). For sales over NZD 200, must include:
• Supplier name and GST number
• Date of supply
• Description of services
• Amount of GST and total price
• For sales over NZD 1,000, the recipient’s name and address are required.

Step: 1 Filing Interval

Taxes are filed are filed typically Quarterly for non-resident remote service providers (periods ending March, June, September, December).

Step: 2 Filing Deadline

Taxes should be filed by the 28th day of the month following the end of the taxable period (exception: 7 May for the March period; 15 Jan for the November period).

Step: 3 Submission

Taxes are filed online via the myIR portal. Payments are typically made via credit card, debit card, or SWIFT/bank transfer in NZD.

Step: 4 Record Keeping

Tax record should be kept for a minimum of 7 years in English (unless otherwise authorized).

PayPro Global Solution: Simplified Registration & Fiscal Representation

Navigating New Zealand’s VAT registration and fiscal representation can be daunting. PayPro Global acts as your Merchant of Record, handling these complexities, including VAT registration and fiscal representation where needed, so you can focus on your business.

Learn more about our MoR services.

FAQ

Overwhelmed by SaaS sales tax compliance?

Our team of SaaS tax experts is here to help. Contact us today for a free consultation.

Talk to an Expert
Mosaic image
en_USEnglish
es_ESEspañol pt_PTPortuguês pt_BRPortuguês do Brasil fr_FRFrançais it_ITItaliano de_DEDeutsch nl_NLNederlands pl_PLPolski ro_RORomână ukУкраїнська zh_CN简体中文 ja日本語 ko_KR한국어 en_USEnglish