International tax experts at Ernst & Young have analyzed the local tax code and international tax treaties with New Zealand to establish the following tax guidelines for RecruitiFi hires within New Zealand.
NEW ZEALAND GENERAL CONSIDERATIONS
How does RecruitiFi supply its services to Employers in New Zealand?
Before diving into the FAQs, let’s clarify the legal tenets underpinning RecruitiFi’s business model:
RecruitiFi’s base of operations: RecruitiFi is a US-based entity with no physical presence beyond American borders.
Distinct legal relationships: In line with the terms and conditions outlined for our business operations in New Zealand, we establish two separate and exclusive agreements:
A service agreement between RecruitiFi and the Employer, for the supply of services by RecruitiFi to the Employer
A service agreement between RecruitiFi and the Recruiter, for the supply of services by the Recruiter to RecruitiFi
Payment process: The transaction process entails Employers paying RecruitiFi for the services rendered, and subsequently, RecruitiFi paying the Recruiter for its services.
Absence of direct interactions: There are no direct contractual or monetary exchanges between the Employers and Recruiters.
Recruitment procedure: Should an Employer decide to recruit a Candidate via the RecruitiFi platform, the employment process ensues without involvement from RecruitiFi.
Precedence of terms: In cases where an Employer and an Agency have had prior contracts, the terms stipulated by RecruitiFi will supersede these existing contracts for the period of engagement through RecruitiFi.
For more information, see Terms | RecruitiFi.
NEW ZEALAND CONSIDERATIONS FOR EMPLOYERS
This section of the FAQ applies to Employers in New Zealand that acquire services from RecruitiFi.
Will RecruitiFi charge GST to Employers in New Zealand?
No, RecruitiFi will not charge GST on its Fees for the services supplied to New Zealand resident entities that provided RecruitiFi with their GST number or Business Number.
Legislative reference: Section 8(4D) of the NZ GST Act
How can an Employer communicate GST number or Business Number?
To communicate your GST registration number to RecruitiFi, please email finance@recruitifi.com.
Why doesn’t RecruitiFi charge GST on its services if an Employer provided a GST number?
RecruitiFi is a non-resident business in New Zealand supplying “remote services” to Employers that are taxable business in NZ.
As such, RecruitiFi’s services will be treated as outside the scope of GST when its services are supplied to GST registered Employers (Business to Business customers).
Legislative reference: Sections 8(3)(c) and 8(4D) of the NZ GST Act.
Does it matter where the Recruiter, Candidate, or JobCast is located?
No, this does not matter. Other factors, such as the Recruiter, Candidate, and/or JobCast’s location will not change the GST treatment that is explained above.
The GST treatment is determined by the nature of RecruitiFi’s services and location of RecruitiFi as service provider and the Employer as service recipient; the location of Recruiter, Candidate, and/or JobCast are not relevant to determine the GST treatment.
Does an Employer have to share some sort of tax documentation?
For RecruitiFi to not charge GST to Employers, the Employer should provide RecruitiFi with its GST number.
A GST number has 9 digits in this format: xxx-xxx-xxx, and it is the same as the Inland Revenue Department (IRD) number.
What if an Employer does not provide the proper tax documentation?
For New Zealand Employers that did not provide a GST number, RecruitiFi will charge GST.
In accordance with RecruitiFi’s Terms, all fees that are agreed between RecruitiFi and Employers are exclusive of GST, so RecruitiFi will charge GST in addition to the Fee payable by the Employer.
NEW ZEALAND CONSIDERATIONS FOR RECRUITERS
This section of the FAQ applies to Recruiters in New Zealand that supply services to RecruitiFi.
Are the Recruiter’s services to RecruitiFi subject to GST in New Zealand?
No, a Recruiter will not charge GST to RecruitiFi (i.e., Recruiter’s services to RecruitiFi will be subject to GST at the rate of 0%).
Why are the Recruiter’s services to RecruitiFi not subject to GST in New Zealand?
As RecruitiFi is a business established in the US, the services provided to RecruitiFi by NZ Recruiters will be zero-rated on the basis that RecruitiFi is a non-resident in New Zealand.
Legislative reference: Section 11A(1)(k) of the NZ GST Act.
Does anything change depending on where the Employer, JobCast, and/or Candidate is located?
No, this does not matter. Other factors, such as the Employer, Candidate, and/or JobCast’s location will not change the GST treatment as explained above.
The GST treatment is determined by the nature of the Recruiter’s services and location of the Recruiter as service provider and RecruitiFi as service recipient; the location of Employer, Candidate, and/or JobCast are not relevant to determine the GST treatment.
Is the service subject to any other taxes?
RecruitiFi will not pay any other taxes to Recruiters in New Zealand.
In this regard, the RecruitiFi Terms stipulate that any Agency Placement Fee and other fees payable to Recruiters are inclusive of any VAT and other taxes.
GLOSSARY
Term | Definition |
RecruitiFi | RecruitiFi, Inc. |
JobCast | Job positions to be filled by Candidates that are submitted/suggested by Recruiters to RecruitiFi |
Recruiter | Recruiters and agencies that provides services to RecruitiFi by submitting/suggesting Candidates to fill JobCasts |
Employer | Employers that hire the services from RecruitiFi to receive the suggested Candidates by RecruitiFi to fill their JobCasts |
Employer placement fee and processing fees | Fees paid by employer to RecruitiFi — if certain conditions are met — upon hiring a Candidate |
Agency placement fees | Fees paid by RecruitiFi to Recruiter — if certain conditions are met — upon placement of a Candidate suggested by the Recruiter |
VAT | Value-added tax; please note “VAT” will be understood to include all non-US indirect taxes (e.g., VAT, GST, JCT) |
5. DISCLAIMER
The information in these frequently asked questions (FAQs) is intended to provide general guidelines regarding the indirect tax treatment of RecruitiFi Inc.’s (“RecruitiFi” or “we”) procurement of Services from Recruiters and supply of Services to Employers in the countries here covered.
The information in these FAQs is provided by Ernst & Young LLP (EY) and is solely provided for the use of RecruitiFi. The information that EY provided to RecruitiFi is to be understood based on a “should” level of advice regardless of any wording (such as “is“ or “will”) referenced in the information provided to RecruitiFi or as reflected in the FAQs.
The FAQs reflect how, in general, i.e., not in specific cases, RecruitiFi believes the local indirect tax rules apply to RecruitiFi’s business model and services supplied by Recruiters to RecruitiFi and services provided by RecruitiFi to Employers.
The FAQs for individual Member States in the European Union (EU) are not based on the individual Member State’s value-added tax (VAT) legislation. Instead, this information is based on VAT rules as included in Council Directive 2006/112/EC of 28 November 2006 on the common system of VAT (the EU VAT directive). As the implementation of the rules in the EU VAT directive into the legislation of an individual Member States may vary country by country and/or the interpretation and corresponding guidance in relation to these rules may also be different between EU Member States, it’s possible that the FAQs for an individual EU Member State may not fully reflect the VAT rules of that EU Member State.
Recruiters, Employers and/or any party other than RecruitiFi cannot, in any form, rely on advice provided by EY to RecruitiFi. Recruiters and Employers are encouraged to consult their own (indirect) tax advisor to confirm the indirect tax treatment as applicable in their specific case as the application and impact of tax laws can vary widely, from case to case, based upon the specific or unique facts involved that are not known to RecruitiFi and/or EY. If your (indirect) tax advisor’s advice does not correspond with the position as outlined in the FAQs, please reach out to RecruitiFi’s tax team.
While RecruitiFi used its best efforts in preparing these FAQs, RecruitiFi makes no representations or warranties with respect to the accuracy or completeness of the content in the FAQs. Neither EY nor RecruitiFi shall be liable for any damages in relation to the information included in the FAQs. Note also that inadvertent errors can occur, and tax rules and regulations often change.
Latest update: January 2025