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One free scan finds every outdated or missing driver and matches the right update for your exact hardware.Free scan · exact hardware matchThere is no single GST payment procedure for imported services. First identify the country whose tax rules apply, then test the supplier, recipient, service and use of the service under that country’s guidance. If the reverse charge applies, you generally calculate tax yourself, report it in the prescribed return fields, pay any net amount through the normal tax process and claim input tax only to the extent the local rules allow.
The examples below cover New Zealand, Australia and Singapore. The final section explains the United Kingdom’s comparable VAT treatment, which is not a GST rule. Do not combine one country’s rate, thresholds or return boxes with another’s.
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What “reverse charge” means for an imported service
Normally, a supplier charges consumption tax and sends it to the tax authority. Under a reverse charge, the overseas supplier may not charge local GST or VAT. Instead, the customer determines whether tax is due, calculates the amount, reports output tax and pays it through the customer’s own return. A permitted input-tax deduction can offset some or all of that output tax, but recovery is never automatic.
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The same invoice can therefore produce different results for two businesses. A fully taxable business may be able to claim the tax it self-accounts for, while a business making exempt supplies, receiving non-business income or using the service privately may have a restricted deduction or no deduction. Registration status also matters, and some countries impose a separate registration test on businesses that are not yet registered.
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Identify the correct country before calculating anything
The phrase “imported services” does not identify one worldwide rule. Before entering a figure in a return, answer these questions:
- Which country’s tax system applies? Use the country where the recipient’s GST or VAT obligations arise and follow that authority’s current return instructions.
- Where is the supplier established? Confirm that the supplier is outside the relevant country and retain the supplier’s legal name and address.
- What was supplied? Describe the service precisely. New Zealand’s examples include management, legal and accounting services and products downloaded online; other countries may classify services differently or exclude particular categories.
- Who received it? Establish whether the customer is GST-registered, required to be registered or unregistered, and whether it is acting in business.
- How will it be used? Separate taxable business use, exempt use, non-business use and private use. The permitted input-tax claim and, in some jurisdictions, whether the reverse charge applies at all can depend on that split.
- What return and payment mechanism is current? Return boxes, registration thresholds, currency rules and filing dates are jurisdiction-specific and can change.
If any answer is uncertain, pause the calculation and check the responsible authority’s current guidance or obtain local professional advice. A reverse-charge entry made in the wrong country or the wrong return box is not corrected merely because the arithmetic is right.
How output tax and input tax interact
Start with the full consideration for the imported service that local law treats as taxable. Apply the country’s rate and currency rule, then record the resulting output tax in the required return field. Separately determine the amount, if any, that qualifies as input tax under the normal recovery rules.
- Full recovery: output tax and an equal input-tax claim may largely offset, subject to the country’s documentation and timing rules.
- Partial recovery: only the allowable proportion is claimed, leaving the balance payable.
- No recovery: the entire self-accounted amount remains a cost or tax payment.
Do not reduce the output-tax calculation because you expect to claim input tax. Calculate and report the output side first; test the deduction separately.
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New Zealand: 15% reverse-charge GST for qualifying imported services
When the New Zealand rule can apply
Inland Revenue says GST applies to certain supplies of services imported into New Zealand. Its examples include management, legal and accounting services and products downloaded online. A key condition is taxable use: the reverse charge applies where intended or actual taxable use is less than 95% of total use, together with the other supply conditions in the authority’s “Special supplies” guidance.
The 95% test is not a general rule for every country. Document how the service will be used and retain the calculation supporting the percentage. If the service is entirely or almost entirely used for taxable activity, confirm whether the stated New Zealand conditions still bring it within the reverse-charge rule rather than assuming that the invoice is outside scope.
Calculate the amount
Inland Revenue states: “The reverse charge requires you to pay GST of 15% based on the price of the services.” Apply 15% to the relevant price under the New Zealand rules. For example, if the taxable price is NZ$10,000, the reverse-charge GST calculation is NZ$1,500 (NZ$10,000 × 15%). The example illustrates the arithmetic only; it does not decide whether the service meets the eligibility conditions or how a foreign-currency amount must be converted.
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Report and pay through the return
When the listed conditions are met, the person liable under the reverse charge is treated as the supplier for registration, output-tax payment and recordkeeping purposes. Include the calculated GST in the GST return and pay the amount due to Inland Revenue through the filing and payment arrangements that apply to the business. The exact return period and payment deadline depend on the business’s filing setup, so use the current Inland Revenue instructions for the period in which the liability arises.
Assess any input-tax claim
After recording the 15% output tax, determine whether the same amount, or only a proportion, is deductible as input tax under the normal New Zealand rules. The taxable-use analysis and the business’s wider use of the service are relevant. Keep the calculation that links the claimed amount to taxable activity; do not assume that self-accounting creates an automatic refund.
New Zealand records to retain
- Supplier identity, overseas address and invoice.
- Description of the service and the price used for the 15% calculation.
- Currency, conversion method and date used where the invoice is not in New Zealand dollars, following current Inland Revenue requirements.
- Analysis showing actual or intended taxable use and the 95% test.
- Output-tax calculation, input-tax calculation and the GST return supporting both entries.
- Evidence of the return submission and payment to Inland Revenue.
Australia: the purchaser decides whether GST is payable
Who the Australian guidance addresses
The Australian Taxation Office says a GST-registered Australian business importing services, digital products or low-value imported goods should not be charged GST by the overseas supplier. The Australian business purchaser must decide whether GST is payable and, if it is, pay the GST owing under reverse-charge rules.
The ATO also says an Australian business that is not GST-registered will need to pay GST on purchases of these imported services, digital products and low-value imported goods. Treat that statement as an overview: confirm that the particular supply, customer and use fall within the detailed rules before making an entry.
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- Check the overseas supplier’s invoice and confirm whether the supplier has charged Australian GST. For a GST-registered business, the ATO says the overseas supplier should not charge GST on the relevant imported purchase.
- Classify the purchase as a service, digital product or low-value imported good and check the current reverse-charge conditions for that category.
- Determine whether the purchaser is registered and whether the use is for taxable business activity or another purpose that affects the liability or deduction.
- Calculate the GST under the current ATO method and record the output-tax amount in the activity statement fields prescribed for the transaction.
- Assess any input-tax credit separately under the ordinary Australian rules. A credit is not created simply by labelling the transaction “reverse charge.”
- Submit the activity statement and pay any net amount by the ATO deadline for that statement period.
The cited ATO page was last updated 11 September 2025. Because the guidance does not establish a universal rate, return-box number or one payment date for every Australian taxpayer, use the current ATO activity-statement instructions that match the business’s registration and reporting cycle.
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Singapore: reverse charge for businesses without full input-tax recovery
When reverse charge applies
IRAS says that, from 1 January 2020, GST-registered businesses that are not entitled to full input-tax credit because they make exempt supplies or receive non-business receipts must account for GST on imported services, except for services specifically excluded from the reverse-charge scope.
This is a different entry test from New Zealand’s 95% taxable-use condition. Singapore’s rule focuses on whether a GST-registered business lacks full input-tax entitlement, while the exact service exclusions must be checked in current IRAS guidance.
Unregistered businesses and the S$1 million test
A non-GST-registered business that would not be entitled to full input-tax credit if it were registered must consider the annual value of imported services and low-value goods when assessing registration liability. IRAS states a threshold of S$1 million over a 12-month period. This is a registration test, not a blanket permission to ignore reverse-charge obligations below the threshold. Review the business’s rolling 12-month value and the current registration rules before deciding that no action is required.
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IRAS instructs taxpayers required to use reverse charge to indicate “Yes” in box 14 and state the value of imported services, and where applicable low-value goods, subject to GST. The same amount is also included in total standard-rated supplies in box 1.
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- Determine that the imported service is within scope and not one of the listed exclusions.
- Calculate the GST using the current Singapore rate and tax-base instructions for the relevant period.
- Mark “Yes” in box 14 and report the value subject to GST as IRAS directs.
- Include the same value in box 1 as part of total standard-rated supplies.
- Claim input tax only under the normal recovery rules and retain evidence for the proportion claimed.
- File and pay through the GST return process by the business’s assigned deadline.
Supplier-payment timing condition
IRAS return guidance describes a 12-month supplier-payment condition that can require repayment of claimed input tax or permit an adjustment in specified circumstances. The detailed conditions determine whether an adjustment is required, so check the current IRAS instructions before making or reversing a claim. Do not treat the 12-month reference as a universal rule for New Zealand, Australia or other countries.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.How the three GST systems differ
| Jurisdiction | Main scope signal | Return or payment instruction established by the cited guidance | Distinctive threshold or condition |
|---|---|---|---|
| New Zealand | Certain imported services, including examples such as management, legal, accounting and downloaded products; taxable use below the stated level can bring a supply within the rule. | Include the GST in the GST return and pay Inland Revenue; the liable person is treated as the supplier for registration, output-tax payment and records. | 15% GST on the price of the services; intended or actual taxable use less than 95% of total use, with other supply conditions. |
| Australia | Imported services, digital products and low-value imported goods; the purchaser determines whether GST is payable. | The purchaser accounts for GST under reverse-charge rules and pays any amount owing through the applicable ATO activity-statement process. | GST-registered businesses generally should not be charged GST by the overseas supplier for the relevant imported purchase; the ATO also describes liability for some non-registered businesses. |
| Singapore | GST-registered businesses without full input-tax entitlement, subject to specified service exclusions; certain non-registered businesses must assess registration liability. | Indicate “Yes” in box 14, report the value subject to GST and include the same amount in box 1; input claims follow normal recovery rules. | S$1 million over 12 months is the stated registration-assessment threshold for annual value of imported services and low-value goods. |
| United Kingdom (VAT comparison) | Qualifying services received from abroad by a UK business. | Output VAT in box 1; recoverable input VAT in box 4; full supply value in boxes 6 and 7; convert foreign-currency amounts into sterling. | Partial exemption or other restrictions can leave VAT payable even where output and input amounts normally offset. |
United Kingdom comparison: this is VAT, not GST
HM Revenue & Customs uses a reverse-charge process for qualifying services received from abroad by a UK business. It is useful as a comparison, but it should not be copied into a GST return in another country.
- Calculate output VAT on the full value of the qualifying service and enter it in box 1.
- Include a matching amount in box 4 only to the extent the business is entitled to reclaim it.
- Enter the full value of the supply in boxes 6 and 7.
- Convert a foreign-currency amount into sterling using the applicable HMRC conversion rule.
- Check partial exemption and other input-tax restrictions; these can leave VAT payable.
HMRC explains that the normal effect is often offsetting output and input tax, but states: “This means there will be no tax for you to pay, unless your business is partially exempt from paying VAT.” The cited HMRC page was last updated 31 December 2020, so verify the current return instructions before filing.
Calculation and filing checklist
Use this sequence after selecting the correct country:
- Capture the transaction: save the contract, invoice, supplier location, service description, invoice currency and payment evidence.
- Confirm scope: check the recipient’s registration status, the service category, place-of-supply rule and any exclusions.
- Analyse use: document taxable, exempt, non-business and private use, including any country-specific percentage or registration test.
- Set the tax base: use the local rule for the price or value and apply the required foreign-currency conversion.
- Calculate output tax: use the rate and tax point applicable to that jurisdiction and reporting period.
- Complete the return: enter the output tax and transaction value in the authority’s prescribed boxes. Never substitute another country’s box numbers.
- Test input recovery: calculate only the proportion allowed under normal deduction rules and retain the supporting allocation.
- Check adjustments: review country-specific payment-timing, partial-exemption and correction rules before claiming or reversing input tax.
- File and pay: submit the return and pay the net amount by the authority’s current deadline; retain confirmation.
Common mistakes and how to avoid them
- Using the supplier’s foreign tax treatment as the answer: an overseas invoice with no local GST does not prove that no reverse charge is due.
- Assuming all imported services are covered: service exclusions, place-of-supply rules and customer status can change the result.
- Netting before reporting: calculate output tax first, then test the separate input-tax claim.
- Borrowing another country’s return boxes: New Zealand, Singapore and the United Kingdom use different forms and labels.
- Ignoring unregistered-business rules: Australia describes potential GST liability for non-registered businesses, while Singapore uses a registration assessment involving S$1 million over 12 months.
- Failing to retain use evidence: taxable-use percentages and input recovery depend on records, not an unsupported estimate.
- Relying on an old rate or form: confirm the current authority guidance for the filing period, especially where the cited page has an earlier update date.
What to do before submitting the return
Reconcile the imported-service list to the general ledger and foreign-supplier accounts for the period. For each item, confirm the country, scope decision, tax base, currency conversion, output-tax amount, input-tax proportion and return box. Have a second reviewer check unusual services, mixed-use allocations, exclusions and any registration threshold calculation. If the authority’s current instructions differ from the examples above, follow the current instructions for the relevant country and period.
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