Australia and New Zealand run separate goods and services tax (GST) systems with different rates, thresholds, and rules for when a foreign business must register and charge tax. GST in Australia is 10%, while GST in New Zealand is 15%. Selling across the Tasman doesn’t exempt you from either. Businesses with enough overseas sales generally owe GST to the Australian Taxation Office (ATO) and New Zealand Inland Revenue, regardless of where the seller’s home base is.

Below, we cover how GST between Australia and New Zealand works, how the rules apply differently to digital services and physical goods, and how businesses can manage the compliance workload without doing it all manually.

Key takeaways

• Australia’s GST is 10%, while New Zealand’s is 15%, and both often apply to foreign businesses selling into their respective markets.

• Even if exported goods and services are free of GST in Australia, you might owe GST on them in New Zealand.

• The rules are complicated. Tax tools can help you automate GST calculation, threshold monitoring, and reporting for businesses processing payments across both markets.

How does cross-border GST between Australia and New Zealand work?

In both systems, the underlying logic is that consumption taxes should follow consumption. The country where a customer uses or receives something generally taxes it, which is straightforward when physical goods cross a border through customs. It’s more complicated with digital services for which there’s no manifest and no obvious collection point.

Both Australia and New Zealand responded to this issue by extending their GST rules to cover remote services, i.e., digital products and services sold by offshore suppliers to local consumers. Each country has a revenue threshold for registration.

Consumption in Australia

Australia requires foreign businesses, including Kiwi companies, selling digital products or services to Australian consumers to register for Australian GST once their Australian GST turnover reaches $75,000 Australian dollars (AUD). However, GST does not apply in all cases.

Consumption in New Zealand

New Zealand requires foreign businesses, including Australian ones, selling into New Zealand to register for NZ GST if their supplies exceed $60,000 New Zealand dollars (NZD). Software and other digital content consumed in NZ count as remote services when supplied by a company abroad and might be subject to GST depending on additional circumstances, including the extent of activity.

Should businesses in Australia charge GST to New Zealand customers?

Whether or not an Australian business needs to charge GST to NZ customers depends on what it’s selling and who’s buying it. Generally, exports are GST-free in Australia, and imports are taxed in the country of destination. While physical goods exported from Australia are free of Australian GST, New Zealand might require you to collect NZ GST if those goods are low-value goods sold to NZ consumers.

Digital services are free of Australian GST if the consumption happens outside Australia, and both goods and services exported from Australia are generally free of Australian GST. So while New Zealand GST might apply to Australian companies’ goods sold there, Australian GST wouldn’t apply to those same sales.

Should businesses in New Zealand charge GST to Australian customers?

Exports are generally zero-rated in New Zealand, and imports are taxed in the country of destination. Australian GST usually applies to imported services, digital products, or goods worth $1,000 AUD or less. However, there are many factors that affect how much GST you need to charge if you’re importing into Australia. For more guidance on the particulars of your situation, consult the ATO.

What are the risks of getting cross-border GST wrong?

Missing a registration threshold is one common GST mistake. If a New Zealand business hits $75,000 AUD in Australian sales, doesn’t register, and then charges nothing, the ATO can impose interest and penalties, and can even prosecute. Here are some other scenarios to keep in mind:

• Incorrect zero-rating of exports: To treat a supply as GST-free on export, it must meet specific conditions, and the goods must be exported within the required 60-day window after either issuing an invoice or receiving payment for the goods.

• Charging the wrong country’s GST: If an Australian business charges Australian GST on sales to NZ consumers rather than registering in NZ and charging NZ GST, then the ATO receives GST it shouldn’t have received, and Inland Revenue is owed GST that was never collected.

• Currency and timing errors in reporting: Both the ATO and Inland Revenue require foreign currency amounts to be converted to local currency for reporting purposes. Inconsistent conversion approaches could create discrepancies that attract scrutiny.

Tools such as Stripe Tax automate GST calculation on transactions processed through Stripe and apply the correct tax treatment based on the customer’s location, the nature of the product or service, and the customer’s tax registration status.

Stripe determines whether Australian GST, NZ GST, or neither applies to a given transaction for businesses operating across Australia and New Zealand and applies the correct rate. It also generates transaction-level records that make it easier when you’re filing or facing an audit and removes the transaction-by-transaction manual work that makes cross-border compliance so time-consuming at volume.

How Stripe Tax can help

Stripe Tax reduces the complexity of tax compliance so you can focus on growing your business. Stripe Tax helps you monitor your obligations and alerts you when you exceed a sales tax registration threshold based on your Stripe transactions. In addition, it automatically calculates and collects sales tax, VAT, and GST on both physical and digital goods and services—in all US states and in more than 100 countries.

Start collecting taxes globally by adding a single line of code to your existing integration, clicking a button in the Dashboard, or using our powerful API.

Stripe Tax can help you:

• Understand where to register and collect taxes: See where you need to collect taxes based on your Stripe transactions. After you register, switch on tax collection in a new state or country in seconds. You can start collecting taxes by adding one line of code to your existing Stripe integration or add tax collection with the click of a button in the Stripe Dashboard.

• Register to pay tax: Let Stripe manage your global tax registrations and benefit from a simplified process that prefills application details—saving you time and simplifying compliance with local regulations.

• Automatically collect tax: Stripe Tax calculates and collects the right amount of tax owed, no matter what or where you sell. It supports hundreds of products and services and is up-to-date on tax rules and rate changes.

• Simplify filing: Stripe Tax seamlessly integrates with filing partners, so your global filings are accurate and timely. Let our partners manage your filings so you can focus on growing your business.

Learn more about Stripe Tax, or get started today.