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If you offer accommodation or ride share services in New Zealand via an electronic marketplace (e.g., Airbnb or Uber), new GST rules apply to you from 1 April 2024.

Previously, if your turnover did not exceed the $60,000 GST registration threshold, your services were not subject to GST. Now, however, the electronic marketplace is required to charge GST to the customer on the provision of your services, regardless or the $60,000 threshold.

This change applies to ‘listed services’ which incorporate all commercial, short-stay and visitor accommodation (such as Airbnb, Bookabach and Booking.com), as well as all ride-share and food and beverage delivery services (such as Uber, Ola and Lyft). The marketplace operator is now deemed to be the supplier of the services and is required to charge and return GST at 15% on all services provided to end-users through their marketplace.

If you are GST registered, the marketplace operator will charge your customer GST on your behalf and pay the GST to Inland Revenue, and you will treat the service as zero rated in your GST return. For example, Sarah is GST registered and rents out a property via Airbnb for $100 a night. Airbnb is deemed to be the party supplying the accommodation and adds GST to the nightly rate, therefore charging guests $115. Airbnb pays the $15 GST to the Inland Revenue. The transaction between Airbnb and Sarah is zero-rated, therefore Sarah includes $100 as a zero-rated supply in her GST return, and she continues to claim GST on her costs.

If Sarah was not GST registered, Airbnb would still charge GST to the guest and pay the GST to Inland Revenue. However, Airbnb deducts an 8.5% GST input tax from the supply (referred to as a flat-rate credit), and passes that 8.5% credit to Sarah, paying the net of 6.5% to Inland Revenue. The flat-rate credit is intended to approximate the amount of GST that Sarah could claim as input tax if she were GST registered. Therefore, Sarah would receive $8.50 (8.5% of $100) from Airbnb which is not taxable income to Sarah. In addition, because Sarah has received the credit, in her tax return she deducts her Airbnb expenses on a GST-exclusive basis.

Large commercial businesses that offer over 2,000 nights of short-stay accommodation per year via a marketplace can choose to enter into an agreement with the marketplace operator to opt-out of the new rules and allow them to continue to be responsible for their own GST obligations.

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