New Zealand and Australia - GST Liability for Live Events

The introduction of Goods and Services Tax (GST) in New Zealand in 1986 marked the beginning of a new era regarding this country's tax policy. The primary purpose of this shift was to make the tax system more efficient and simplify tax procedures, thus reducing the administrative burden for government and taxpayers. Initially set at 10%, the New Zealand government increased the GST rate to 15%.

On the other hand, Australia conducted its tax reform in 2000, replacing several existing taxes, including the wholesale sales tax with GST. Except for a few strictly defined exceptions, GST applies to most transactions related to the supply of goods and services. In Australia, the GST rate is set at 10%.

Regarding live events and GST applicability, in both countries, live events are generally subject to GST. 

GST Rules For Live Events in New Zealand

GST rules for live events in New Zealand state that GST applies to the total ticket price for live events. Tickets subject to GST include concerts, sporting events, and theater performances. It is noteworthy that event organizers, as service suppliers, must register for GST once their turnover is above the NZD 60,000 threshold.

While rules for domestic performers are more straightforward, international performers may face certain complexities with taxation in New Zealand. If international performers' earnings in New Zealand exceed the abovementioned threshold, they must register for GST. Apart from administrative challenges, additional local taxes might apply.

What are the rules for selling tickets for online events, such as virtual concerts?

Local businesses supplying tickets for virtual contracts must charge and collect GST on these services if their yearly turnover exceeds the NZD 60,000 threshold.

The New Zealand government has recently addressed issues caused by the expansion of the digital economy and services. In 2016, it implemented new rules for overseas businesses that provide remote services to customers in New Zealand. 

Therefore, foreign digital services suppliers involved in selling online tickets must register for GST once their turnover in New Zealand exceeds NZD 60,000 in the last 12 months or is likely to exceed that threshold in the following 12 months.

An important step in this process is foreign businesses' obligation to verify two consistent pieces of evidence indicating that a customer is a New Zealand resident. Evidence such as the customer’s billing address, device’s IP address, bank details, and other commercially relevant information are all considered valid in this process.

GST Rules For Live Events in Australia

Australia’s approach to GST on live events is similar to New Zealand’s. GST is generally applicable to the sale of tickets and other associated services. Event organizers must register for GST if their turnover exceeds the AUD 75,000 threshold. 

For international artists, the situation can be more challenging. While the supply of live performance services is taxable, applying GST may depend on whether the performer is considered a resident or non-resident for tax purposes. The Australian Taxation Office (ATO) has guidelines to determine the GST implications for international performers, including the potential need for a local agent to handle GST obligations.

What are the rules for the supply of digital products and services?

From July 1, 2017, the ATO has mandated that foreign suppliers of digital products and services to consumers in Australia, including tickets to online events, register for GST and comply with Australian tax laws once they exceed the GST registration threshold. 

Foreign businesses reach the GST registration threshold if:

• their current turnover for the current month and the previous 11 months totals AUD 75,000 or more, or

• their projected turnover for the current month and the next 11 months will likely be AUD 75,000 or more.

To determine if the buyer is an Australian or not, two elements are taken into consideration:

1. Residency element, and

2. Consumer element.

Foreign businesses can determine residency element by utilizing information about the buyer available in their business systems, such as the buyer's billing address, the buyer's mailing address, the buyer's banking or credit card details, including the location of the bank or credit card issuer, location-related data from third-party payment intermediaries, mobile phone SIM or landline country code, IP address and other data used internationally to determine buyers location or status.

Once foreign businesses conclude that the buyer is an Australian resident, they must confirm whether the buyer qualifies as a consumer. A buyer is considered a consumer if they are not a business registered for Australian GST or if they are registered for Australian GST but do not buy the imported services or digital products for use in their business.

Conclusion

Domestic and foreign businesses in New Zealand and Australia must understand the GST requirements regarding live events. Both countries have a similar approach to taxing live events, but differences are notable. Properly navigating these regulations ensures compliance with tax laws and avoids potential administrative complications.

Source: Inland Revenue - GST, Inland Revenue - Supplying remote services into New Zealand,  Australian Taxation Office (ATO) - How GST Works