E-Commerce & Dropshipping GST Rules
A master guide for online sellers, dropshippers, and digital service providers selling to the New Zealand market.
The 10-Second Rule
If your sales to NZ consumers exceed $60,000/year, you must register for GST and charge 15% on all "low-value goods" (under $1,000). Goods over $1,000 are zero-rated at checkout as GST is collected at the border.
The E-Commerce GST Flow
*Applies to both physical goods and digital services.
Understanding the "Netflix Tax" & LVG
New Zealand's GST system for e-commerce is designed to create a level playing field for local retailers. In the past, overseas sellers had an unfair 15% price advantage. Today, the Low Value Goods (LVG) regime ensures that GST is collected on almost every consumer purchase.
Whether you are an NZ-based Shopify store or an overseas dropshipper, the IRD treats the "Place of Consumption" as New Zealand. If the person paying you is in NZ, the tax applies.
Real-World E-Commerce Scenarios
Sarah sells jewelry from a supplier in China. A customer in Auckland buys a $200 ring. Sarah’s store must charge $30 GST (15%) and pay this to the IRD, as the item is under the $1,000 threshold.
An online store sells a high-end camera for $2,500. Because the item is >$1,000, the seller charges 0% GST at checkout. The NZ Customs service will then collect the GST from the buyer before releasing the package.
GST Rates by Sale Type
| Product Type | Threshold | GST Rate |
|---|---|---|
| Physical Goods | Under $1,000 | 15% |
| Physical Goods | Over $1,000 | 0% (Zero-Rated) |
| Digital Services | Any Amount | 15% |
Compliance Checklist
- ✓ Track trailing 12-month sales to NZ customers.
- ✓ Ensure your invoice clearly states "Tax Invoice".
- ✓ Map your Shopify/WooCommerce tax zones to 15%.
Critical Audit Risk
The IRD frequently audits e-commerce businesses by cross-referencing **NZ Customs Import Entries** with GST returns. If your imports are high but your reported sales are low, an investigation is likely.
Frequently Asked Questions
Yes. If the product is subject to GST, the shipping cost to deliver it to the NZ customer is also subject to 15% GST.
In many cases, the "Marketplace Facilitator" (Amazon/Etsy) collects the GST. You must ensure you don't double-charge the customer in your own records.
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