Zero-rated exports and services to non-residents in New Zealand

Selling to clients outside New Zealand? Exported goods and many services to non-residents are zero-rated: you charge GST at 0%.

Exported goods (s 11)

Goods you export from New Zealand are zero-rated. Keep proof that they left the country, such as shipping or courier documents. Invoice Native prints "Zero-rated export of goods (GST Act s 11)" when you choose this supply type.

Services to non-residents (s 11A)

Services you supply to a non-resident who is outside New Zealand when you do the work are usually zero-rated. Common examples are design, software and consulting for overseas businesses. Invoice Native prints "Zero-rated: services to a non-resident outside New Zealand (s 11A)".

They're not zero-rated when they relate to land or goods in New Zealand, or when the person receives them while they're in New Zealand.

On the invoice

• Choose the supply type: every line is then zero-rated.
• You can invoice in your client's currency; when GST is charged on a foreign-currency invoice, the NZD amounts print too.
• Zero-rated sales still go in your GST return: in Box 5 and Box 6.

Make one with the generator

In the free New Zealand invoice generator, register for GST, then pick the supply type "Goods exported from New Zealand" or "Services to a client outside New Zealand". Your client's address can be abroad, and every line is zero-rated.

A worked example

A Christchurch software developer builds an app for a company in Sydney that has no presence in New Zealand. The client is outside New Zealand while the work is done, so the service is zero-rated under section 11A. The invoice shows:

• "Tax Invoice", the developer's name and GST number;
• the client's name and Sydney address;
• "App development, September — A$12,000";
• GST at 0% and the total of A$12,000;
• "Zero-rated: services to a non-resident outside New Zealand (s 11A)".

In the developer's GST return the sale goes in Box 5 and Box 6 in New Zealand dollars, at the exchange rate on the date of supply.

Goods: proof of export

For goods, keep the documents that show they left New Zealand — a bill of lading, an air waybill or a courier's tracking record — with the invoice. Goods must generally be exported within 28 days of the time of supply to be zero-rated. If they don't leave the country, the sale is taxed at 15%.

When services aren't zero-rated

Section 11A has exceptions. Services are usually taxed at 15% if they:

• relate to land in New Zealand, such as advice on a New Zealand property;
• relate to goods in New Zealand at the time, such as repairs;
• are received by a person in New Zealand — for example an overseas client's employee who attends your training in Auckland.

When in doubt, check Inland Revenue's guidance or ask your accountant: the rules depend on the facts.

Zero-rated isn't exempt

Zero-rated sales are taxable at 0%. They count towards the $60,000 registration threshold, they go in your GST return, and you can still claim GST on the costs of making them. Exempt supplies, like residential rent, are left out of the return, and the GST on their costs can't be claimed.

Exports to Australia

Australian clients are the most common overseas clients for New Zealand businesses. The same rules apply: goods shipped to Australia are zero-rated exports, and services to an Australian business that isn't in New Zealand when you do the work are usually zero-rated under section 11A. Your client may need to account for Australian GST themselves under Australia's reverse-charge rules, but that's their obligation, not yours.

Common mistakes

• Zero-rating a service because the client's address is abroad, when the person receiving it was in New Zealand.
• Forgetting to keep proof that goods left the country.
• Leaving zero-rated sales out of the GST return — they belong in Box 5 and Box 6.
• Charging GST on an export: your client can't claim New Zealand GST back.