Quick Summary
Zero-rating for NZ GST is not eligible in specific situations, even if a supply might appear to qualify (e.g., an export). The rules are precise; for instance, certain goods delivered within NZ, even if to a non-resident, or services consumed domestically, would typically not be zero-rated. Always refer to IRD guidelines for specific scenarios.
Details
Exceptions to Zero-Rating Eligibility
While zero-rating is a beneficial provision for many businesses, particularly those engaged in international trade, there are specific circumstances where a supply is not eligible for zero-rating under New Zealand's GST rules.
- Consumption in NZ: Generally, if the goods or services are consumed or intended for consumption within New Zealand, they cannot be zero-rated, even if the recipient is a non-resident. The intent of zero-rating is for export-equivalent transactions.
- Physical Delivery in NZ: If goods are delivered to a recipient in New Zealand, they are typically not zero-rated, even if the contracting party is overseas.
- Specific Exclusions: Certain services, despite being provided across borders, might have specific exclusions from zero-rating if they are deemed to have a domestic connection or benefit to a New Zealand resident.
- Documentation Requirements: Failure to hold sufficient documentation to prove the export or non-resident status of the supply can also invalidate zero-rating.
It is crucial for businesses to consult the detailed guidance from the Inland Revenue Department (IRD) regarding zero-rated supplies to ensure correct application and avoid potential non-compliance issues.