GST Reverse Charge Calculator NZ 2026

If your business buys services from overseas (consulting, software development, marketing, IP licensing, professional services) and you don't make 95%+ taxable supplies, you must self-assess GST on those imported services under section 8(4B). This calculator tests the 95% intended use and 90% actual use thresholds, calculates the reverse charge GST you owe, and shows when the secondary trigger applies. Especially relevant for residential landlords, financial service providers, and mixed-use businesses.

Why the reverse charge exists

When a NZ business buys services from a NZ supplier, the supplier charges 15% GST. If the buyer makes mostly exempt supplies (banks, insurance, residential rent), they cannot recover the GST and bear it as a real cost. Without the reverse charge, the same business could buy the equivalent service from an overseas supplier (who doesn't charge NZ GST) and avoid the tax. The reverse charge levels the playing field by requiring the NZ recipient to self-assess GST when they make mostly exempt supplies.

The two thresholds

Primary test - 95% intended use at acquisition

If at the time you acquire the imported service you intend to use it for less than 95% taxable supplies, the reverse charge applies. You self-assess GST on the full value of the services in the GST return covering the time of supply. You can then claim a GST input credit for the taxable use portion under the apportionment rules.

Secondary test - 90% actual use during adjustment period

If at acquisition your intended taxable use was 95% or more (so no reverse charge applied initially), but your actual taxable use over the adjustment period drops below 90%, a deemed self-supply is triggered. The time of supply is the last day of the adjustment period in which use dropped. You self-assess GST on the value of the services for that period.

When the reverse charge does NOT apply

• The recipient is not GST-registered AND turnover (including imported services) is below $60,000
• The recipient makes 95% or more taxable supplies and actual use stays at 90% or above
• The supply would not be a taxable supply if it were made in NZ
• The services are GST-exempt under the standard GST Act exemptions

Common scenarios

• Bank using offshore IT consultants: Bank makes mostly exempt financial services supplies, intended taxable use under 95%. Reverse charge applies to the full consulting fee.
• Residential landlord buying overseas property management software: Residential rental is exempt, so taxable use of the software is low. Reverse charge applies if landlord is GST-registered.
• SaaS company buying overseas marketing: If the SaaS company makes 95%+ taxable supplies, no reverse charge needed initially. Secondary test only triggers if actual taxable use drops below 90%.

Sources

• GST Act 1985 Section 8(4B) - Reverse charge
• GST Act 1985 Section 9(2)(h) - Time of supply
• IRD - Reverse charge for imported services
• IRD - Special supplies

Related calculators

• GST Calculator — standard 15% GST
• GST on Imports — for physical goods imports
• GST Change of Use Calculator — apportionment rules
• GST Zero-Rated Supply Checker — identify the taxable supply category
• GST Registration Threshold — the $60k question