Selling online to overseas customers is operationally straightforward and legally more complex than domestic selling. The mechanics are easy; the obligations follow the customer.
GST and export
Goods exported from New Zealand are generally zero-rated for GST, meaning you charge no GST but can claim input tax on your costs. Zero-rating is conditional on the goods being exported within the required period and on you holding documentary evidence.
Keep proof of export. Where the conditions are not met the supply can be treated as standard-rated, and you become liable for GST you never collected.
The customer’s country taxes the import
Most countries apply their own consumption tax and potentially duty on imported goods, frequently with a low or zero de minimis threshold.
This determines the customer experience more than anything else. Two models:
- Delivered duty unpaid — the customer pays tax and duty on arrival, often with a handling fee from the carrier. Cheaper for you and a frequent source of complaints, refused parcels and chargebacks. Customers who did not expect a bill often refuse delivery.
- Delivered duty paid — you collect tax and duty at checkout and pay it. Better experience, and it requires you to calculate correctly and may create registration obligations in that country.
Several jurisdictions now require overseas sellers above a threshold to register and collect their consumption tax on low-value goods. Australia, the United Kingdom and the European Union all have regimes of this kind. Check whether your sales volume into a market triggers registration.
Whichever model you use, disclose it clearly before checkout. Failing to tell a customer they will face a bill on arrival is a Fair Trading Act problem as well as a service one.
Foreign consumer law may apply
Selling into a country can bring its consumer protection law with it, including mandatory rights that do not exist in New Zealand.
The most significant is the cooling-off right in many jurisdictions — a period during which a distance-selling consumer may cancel and return goods for any reason. The European Union and United Kingdom both have such rights, and they cannot be excluded by your terms.
That changes returns economics substantially. A right to return for change of mind, with the seller bearing some costs, is a materially different proposition from New Zealand where no such statutory right exists.
Returns from overseas
Model this before entering a market. Return freight from the northern hemisphere frequently exceeds the value of a mid-priced item, and the returned goods may attract duty coming back in.
Options include a local returns address through a service provider, refunding without requiring return for low-value items, or accepting that returns are a cost of the market.
Whichever you choose, state it clearly. Ambiguous international returns policies generate disputes and chargebacks.
Product compliance in the destination
Safety standards, labelling requirements, restricted substances and electrical requirements all apply in the destination market and are frequently stricter than New Zealand’s.
Where you sell direct to consumers you may be treated as the responsible party without a local presence, which is worth confirming rather than assuming.
Prohibited and restricted goods
Check both New Zealand export controls and the destination’s import restrictions. Categories that catch sellers: food and supplements, cosmetics, anything with a lithium battery, plant and animal products, knives and tools, and alcohol.
Dangerous goods rules apply to shipments, and undeclared dangerous goods can result in abandonment and penalties.
Payments and fraud
Cross-border card transactions carry higher fraud and chargeback rates. Use address verification and fraud screening, be cautious with mismatched billing and delivery addresses, and understand your payment provider’s chargeback process.
Currency: either price in the destination currency and manage the exchange exposure, or price in New Zealand dollars and accept that customers see a fluctuating amount.
Privacy
Customer data is personal information under the Privacy Act 2020, and other jurisdictions impose their own obligations on businesses handling their residents’ data. The European Union’s regime applies to businesses offering goods to people in the EU regardless of where the business is.
Where you use overseas providers, disclosure obligations and the requirement for comparable protections apply.
New Zealand Customs publishes export guidance, NZTE publishes market entry material, and the Commerce Commission publishes Fair Trading Act guidance on online selling. All free.
General information only, not legal advice.
