There have been several changes to NZ Customs law in recent years which may have an impact on the way you import goods into the country and the duties and GST that you will pay.
Two key considerations for importers include:
Has the Customs value of the goods changed?
As a New Zealand importer of goods, do you make additional payments, post-importation, in relation to imported goods such as these?
Royalty payments (as a condition of purchasing the imported goods)
transfer pricing adjustments
Wash up payments for overseas freight and warehousing costs
These extra payments to offshore suppliers could be made after the goods are imported and these could impact the Customs value of the imported goods – leading to additional customs duties, including GST, being required on the additional payments. Therefore, the importer needs to consider registering under the Provisional Values scheme and declare the final Customs value of the goods once the additional consideration is available.
Do your imported goods involve successive sale transactions?
The primary method of valuation for Customs is the Transaction Value Method, which is the price paid or payable for the goods when sold for export to New Zealand plus other relevant adjustments.
In instances of successive sale transactions in relation to goods imported into New Zealand, an importer is no longer able to choose any transaction price in a chain of sales, and only the price in respect of the last sale that occurs immediately before the goods enter into New Zealand can be used to determine a transaction value.
For example, a Holding Co. in USA sells goods to a subsidiary in Australia which in turn sells goods to its subsidiary in New Zealand. The subsidiary in New Zealand sells goods to its customers, however goods are imported directly from USA to New Zealand. The question is what is the ‘last sale’ to be used for imported goods and payment of Customs duty?
Determining which is the ‘last sale’ will depend on the specific circumstances.
You may need assistance from an adviser with obtaining a binding ruling on this matter with NZ Customs.
Other considerations for importers
There are a range of considerations for importers related to:
If you have questions around customs and the duties you’re paying on imported goods, reach out to your specialist BDO Customs adviser.