NEW ZEALAND: Proposed changes in Goods and Services Tax for telecommunications

The New Zealand Government has proposed to make changes to the goods and services tax (GST) telecommunications rules. The move is designed to bring New Zealand into line with OECD and international trends in relation to the provision of telecommunications services with focus on the customer’s usual place of residence. The Minister’s release (on 17 May 2019) and the officials’ issues paper can be viewed here.

Most of the current rules in the Goods and Services Tax Act 1985 (NZ) for supplies of telecommunications services (introduced in 2003) will be repealed with effect from 1 October 2020. In summary, it is proposed that:

a) The GST treatment of most telecommunications services will be aligned with the treatment of other remote services and determined based on the residency of the consumer.

b) However, the GST treatment of some specific telecommunications services will be determined by the physical location of the recipient rather than their residency, if to receive the services, the recipient needs to be at a specific location (eg. SIM card purchased in overseas country).


The proposed changes are not intended to change the GST treatment of most telecommunications services. However, the proposed changes would mean that:

a) Outbound mobile roaming services received by New Zealand residents overseas would be subject to GST at the standard rate of 15%; and

b) Inbound mobile roaming services received by non-residents in New Zealand would no longer be technically subject to GST.


NZ is trying to follow the overseas trend of applying VAT/GST by reference to two main types of services – on-the-spot services and remote (or electronically supplied) services. Telecommunications suppliers who are not resident in NZ will need to take note of the following practical aspects:

a) if the telco supplier is supplying telco services to NZ consumers (B2C) and not accounting for GST under the remote services rules, there will be GST obligations under the new rules (likely from October 2020); and

b) if the telco supplier is currently accounting for NZ GST when non-residents of NZ (who are resident in the country of the telco supplier) use roaming services while they are on holiday in NZ, then no GST is likely to apply from October 2020.


Supplies of telco services in a B2B context should not lead to significant or adverse issues under the new rules.

Submissions are due by 28 June 2019.


For more information please contact:

Eugen Trombitas, Partner, PwC New Zealand
Tel: +64 21 493 903

Catherine Francis, Director, PwC New Zealand
Tel: +64 20 406 76744



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