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Effective from 1 April 2024, all online marketplace operators who facilitate the sale of listed services will be required to collect and return Goods and Services Tax (GST) (at 15%) when the service is performed, provided or received in New Zealand. (For background, see EY Global Tax Alert, New Zealand proposes various changes to Goods and Services Tax Law, dated 30 August 2022). Inland Revenue also issued a Special Report, "Marketplace rules for listed services (June 2023)," dated 19 June 2023, which provides further information.

Operators of electronic marketplaces who supply "listed services" are required to register and return GST on these services. A flat-rate scheme is available to benefit underlying suppliers that are not registered for GST. GST-registered sellers may opt out of the marketplace rules.

Listed services include:

• Ride-sharing and ride-hailing
• Food and beverage delivery
• Taxable short-stay and visitor accommodation

GST will also apply to closely connected services if they are facilitated through the online marketplace operator.

The new rules apply to marketplace operators regardless of their residence for GST purposes. Currently, it is the underlying supplier's responsibility to account for the GST (if the supplier is GST-registered).

Supplies captured by the new provisions will be deemed to be two supplies: (1) a supply from the underlying supplier to the operator of the electronic marketplace (zero-rated if the underlying supplier is GST-registered, or not subject to GST if not registered); and (2) a supply from the operator of the electronic marketplace to the recipient, on which the operator is required to account for GST at 15% (through filing quarterly GST returns).

Operators will be required to collect sufficient information about sellers listed on their platforms to determine whether or not a seller is GST-registered. If a seller is not GST-registered, the operator would apply the flat-rate credit scheme. Under this scheme, the operator will be required to collect GST at the standard rate of 15%, return 6.5% GST to Inland Revenue and pass 8.5% GST to the seller. Operators should treat sellers as not GST-registered unless they have been informed that the sellers are GST-registered at the time of supply of the listed service. Operators must also provide a monthly statement to the seller showing the flat-rate credit passed on to them.

Some GST-registered sellers can choose to opt out of the marketplace rules and continue being responsible for their GST obligations:

• Sellers making more than NZ$500,000 of supplies in a 12-month period can unilaterally choose to to be liable to account for the GST (subject to notifying the operator of the marketplace).
• Sellers providing short-stay or visitor accommodation that meet a 2,000-night threshold, based on the number of nights of accommodation listed through a single online marketplace, can enter into an agreement with the operator of the marketplace that the seller will be responsible for the GST.
• The Commissioner may make a determination setting out other criteria that can be met to enter into an opt-out agreement.

Amendments to the new rules have been proposed to ensure that the rules work in circumstances where a listing intermediary is interposed between the marketplace and the underlying seller. These have not yet been enacted.

Information reporting overview

New Zealand is implementing the sharing and gig economy information and exchange framework developed by the Organisation for Economic Co-operation and Development (OECD). From 1 January 2024, online marketplace operators resident in New Zealand must collect and report information about sellers that provide relevant services through their marketplace. Generally, relevant services include rental of immovable property (i.e., carparks, short-stay and visitor accommodation) and personal services such as ride sharing, food and beverage delivery, and graphic and web design.

From October 2024, online marketplace operators must register with Inland Revenue for a Digital Platform Interface (DPI) account and file reports with information shown in quarterly periods using the DPI account by 7 February each year. The report will cover the past calendar year and must include any platform information, reportable seller information and immoveable property rental information. Reportable sellers are sellers registered with an online marketplace to offer relevant services. Online marketplaces must also send the sellers a copy of the information reported to Inland Revenue.