What is GST in New Zealand?

Prices shown in shops and online include GST unless they say otherwise — the GST part of what you’ve paid is printed on your receipts. Yes, the GST Calculator New Zealand can be used for both adding GST to an amount and subtracting GST from an amount. This makes it a versatile tool for individuals and businesses dealing with various transactions. Please watch this informative video that the Inland Revenue Department has provided to explain requirements and procedures for New Zealand businesses and individuals. The registration and filling processes are fairly simple but GST in New Zealand requires proper documentation and invoices and must be filed on the due date.

• The 12-month period is not specified i.e., January to December or the fiscal year of April to March, whenever you meet this condition of $60,000 turnover, then it is judicious to register for GST.
• It is applicable if and when the revenue of a business or company in the previous 12 months is $60,000 or the anticipated revenue is $60,000.
• The same $60,000 of sales in any 12-month period registration threshold applies.
• That includes food, medication, equipment, going to the hairdressers, the doctors and even the activities you are likely to do as a traveller in New Zealand.
• If your taxable period ends on the 31st March, then your due is on the 7th May, whereas the latter falls on 15th January.

If you collected more GST than you paid, you pay the balance to us when you file your GST return. You will generally only account for GST on your sales in your GST returns. Once registered, you can manage and pay GST online using myGST, a new section of Inland Revenue’s myIR service.

What is the GST?

For example, Jenny owns a boutique and her taxable period ends on 30th June. Jenny has at least a month to prepare her GST return and file her tax return. In providing taxable supplies, and once GST registered, businesses are obliged to follow various compliance rules, including record keeping. These are top 11 small business accounting tips to save you time and money different from exempt supplies, which do not attract GST to begin with. Some examples include exports, land sales and selling a going concern business. When you register for GST you choose how often you file your GST returns (your filing frequency) and how you record your GST (your accounting basis).

The GST filing date is due on the 28th of the following month after your taxable period. If your request is approved, IRD will contact you with a new taxable period. You can claim GST on your expenses for zero-rated supplies, whereas you cannot claim any expenses for purchases of exempt supplies. If you have registered with the IRD, you have to charge GST at either 15% or 0% when you sell a taxable supply (depending on whether the supply is “zero-rated” or not). If you are not sure whether your business will meet the turnover threshold, but you estimate it might, you can voluntarily register for GST. This option is a good idea if your estimate is close to $60,000 a year (or $5,000 per month), as you can be charged penalties if you fail to register when you are required to do so.

New Zealand GST Calculator

If your turnover falls below $60,000 a year and you don’t want to keep charging GST, or if you close down your business, you need to let Inland Revenue know — call or send a message via myIR. You’ll need to let Inland Revenue know the date you intend to stop charging GST. GST is usually payable on goods and services held at the time you cancel your registration.

New Zealand Goods and Services tax history

GST is a tax on consumption which is applied on the supply of most goods and services. It is also applied to goods upon importation into New Zealand and certain services when purchased from a non-resident. When GST is due and a business need to file and pay the 15% tax, the following documents and procedure can be followed depending on each company, business type, and amount of revenue generated. First of all, businesses must bear in mind how GST is calculated i.e., documentation that shows transaction details during a GST period and have everything ready by GST return dates. You are required to register for GST in New Zealand if your taxable supplies are more than NZD $60,000 in a 12 month period. You can still register for GST even if your taxable supplies are less then NZD $60,000 providing you meet certain criteria.

Registering for GST

When you are registered you add GST to your prices and pass the GST on to us. If you regularly sell goods or services you might need to charge GST to your customers. And you may have to pay GST on any payments you collect, even if you haven’t charged it. That new piece of GST legislation mirrors similar rules governing the supply of digital services introduced in the European Union (EU) in January 2015 on the taxation of digital goods. GST was introduced in conjunction with compensating changes to personal income tax rates and removal of many excise taxes on imported goods.

Because businesses claim back their input GST, the GST inclusive price is usually irrelevant for business purchasing decisions, other than in relation to cash flow issues. Consequently, wholesalers often state prices exclusive of GST, but must collect the full, GST-inclusive price when they make the sale and account to the IRD for the GST so collected. Moreover, a registered business can appear more professional and credible which can benefit your business in the long run.

What is the GST rate in New Zealand?

The Goods and Services Tax (GST) in New Zealand is a comprehensive value-added tax applied to most products and services. Introduced in 1986 by the Fourth Labour Government, GST initially had a rate of 12.5%. This tax, primarily managed by the Inland Revenue Department, is usually filed every one, two, or six months, depending on the business’s preference. You are not required to register for GST if your business turnover is less than $60,000 per year.