GST on trans-Tasman sales: who charges what, and when

GST is a tax on consumption in the country where things are consumed. That one idea explains almost every trans-Tasman GST rule. When you export, your home country steps back, because the goods are being consumed elsewhere. The destination country may then step forward. Here’s how Mr keeps it straight.

What happens to GST when you export?

	Australian exporter	New Zealand exporter
Treatment of exported goods	GST-free	Zero-rated (GST at 0%)
Timing rule	Export within 60 days of payment or invoice, whichever is first	Export within 28 days of the time of supply (extensions possible)
Exported services	GST-free if the recipient and the use are outside Australia, or the recipient is a non-resident not in Australia	Zero-rated for services performed outside NZ, services connected with overseas property, and some remote services to non-residents
Evidence	Keep export and shipping records	Keep evidence the customer is overseas and goods left NZ

The ATO is specific about goods: they’re GST-free if the supplier exports them from Australia within 60 days of receiving any payment or issuing an invoice, whichever happens first. For instalment payments, the 60 days start from the final payment or invoice.

IRD says exported goods qualify for zero-rating and must be exported within 28 days of the time of supply, unless an extension is granted. It also lists categories of zero-rated services and expects you to have sufficient evidence that the customer is overseas, such as billing address or bank details.

What does the destination country collect?

Here’s the part exporters sometimes forget. Even when your home country doesn’t charge GST, the other country may:

• On imports at the border. Goods arriving for a business customer can attract GST at the border in the destination country. Business customers registered for GST can usually claim it back.
• On low value goods to consumers. Both countries require certain offshore sellers to register and charge GST on low value goods sold to consumers. The ATO describes these as goods of $1,000 or less; IRD describes a low value good as a physical good valued at $1,000 or less, excluding GST.
• On remote and digital services to consumers. Both countries require non-resident suppliers of certain digital and remote services to consumers to register and collect GST.
• When you’re doing business there. IRD’s non-resident guidance says that if you carry on an activity supplying goods or services in New Zealand over $60,000 a year, you may need to register. In Australia, GST turnover connected with Australia counts toward the $75,000 threshold.

If you’re selling business-to-business, the rules are often simpler than for consumer sales. If you’re selling to consumers online, check carefully: the registration obligations sit with you as the seller.

Exporting growth tying up cash in stock and freight? Mr’s people look at trade and working capital funding case by case. An enquiry is free and leaves no mark on your credit file. Pick your country and start your enquiry.

How does GST affect an exporter’s cash flow?

Exporters often pay GST on their local costs (materials, freight, rent) while charging no GST on the export sale. That can put them in a regular refund position, which is good news, as long as the refund comes in quickly.

• In Australia, GST refunds come through the BAS, so the timing follows your quarterly or monthly cycle.
• In New Zealand, you can choose monthly filing, which IRD notes suits businesses that regularly get refunds.

A business that switches from domestic sales to mostly exports may want to review its filing frequency with its accountant. The GST side by side compares the two systems in full.

Illustrative example

Illustrative only. A Sunshine Coast skincare maker sells wholesale to New Zealand pharmacies and direct to New Zealand consumers through its website. The wholesale shipments are GST-free exports from Australia, and the New Zealand pharmacies deal with GST at the border. The direct-to-consumer parcels are low value goods, so the business checks the New Zealand rules for offshore sellers and registers to collect New Zealand GST on those sales. Its Australian BAS regularly shows a refund because it pays GST on ingredients and packaging but charges none on exports.

When should you get advice?

Get specific advice when you start selling to consumers in the other country, when you set up a warehouse or staff there, or when your cross-border sales grow quickly. Those are the moments when registration obligations can change, and an hour with an adviser who knows both systems is cheap compared with fixing a missed registration later.

Common mistakes Mr sees

• Charging local GST on exports out of habit. Your invoice templates may need a separate export version.
• Missing the timing window. Goods held in a warehouse past 60 days (Australia) or 28 days (New Zealand) may lose their export treatment.
• No paper trail. Without shipping documents and customer location evidence, GST-free or zero-rated treatment is hard to support.
• Ignoring consumer sales rules. Selling small items direct to consumers across the Tasman can mean registering for GST in the other country.
• Mixing currencies in the books. Record the GST value in local terms on the right date, as your accountant directs.

Selling across the Tasman? Let’s talk funding

Exporting across the Tasman is a brilliant way to grow, even if stock, freight and slower-paying customers stretch the cash in between. When you’d like a buffer, start small: an enquiry carries no credit check, it isn’t scattered to lenders all over town, and a person who understands export businesses reads it. Note how much of your revenue comes from the other country on the form, accurately, and you’ll be matched properly. Pick your country and get started.