Receipts can be used to show the New Zealand authorities that GST has been charged and paid. Businesses operating in New Zealand that add GST to the price of their goods or services must also register for GST. Applicable to the supply of certain domestic goods and services, e.g. hotel accommodation for more than 4 weeks. The Inland Revenue is responsible for the administration of the goods and services tax in New Zealand. Plus, for more information on work taxes, check out our guide to the New Zealand Work Tax System.
Shopping Duty-Free: How to Avoid Paying GST in New Zealand
- You can also use eInvoicing, which is a secure way of exchanging invoices electronically between businesses.
- Estimate a fair and reasonable percentage when you first get the goods or services.
- The applicable GST rate was 10% initially but it was increased to 12.5% in 1989 and then again to 15% in 2010.
- The new rules set out the minimum set of records required to support the figures in your GST returns.
As a business owner, you must register if your annual turnover (total sales) exceeds $60,000 or is expected to exceed that amount in the next 12 months. You can also register voluntarily if your turnover is below that threshold. You can also claim GST on your purchases if they have GST included in them. This lowers your GST due and can create a GST refund if there is a large purchase (e.g. a vehicle purchase). The obligation to register for GST arises when contra asset a business carries out a taxable activity and their turnover exceeds NZ$60,000 in 12 consecutive months or this threshold is expected to be reached in the next 12 months.
Returns and payments are due to the IRD by the 28th of the month following the end of the return period. You may not realise it, but an arrival and departure tax is added to the cost of your flight or cruise ticket to and from New Zealand. The arrival and departure tax for New Zealand, also known as “border processing levies”, is a fee to pay for the Customs and Biosecurity procedures you go through upon arrival and departure. There is no upfront cost to pay for these fees, they are included in the cost of your travel ticket.
New Zealand GST rates
GST returns are due to be submitted by the 28th day of the month following the end of the reporting period and the payment deadline is the same as the return filing deadline. The same registration rules apply to both resident and non-resident businesses carrying out taxable activities. These are the taxes you might be expected to pay as a tourist or international visitor to New Zealand, which we will go into more detail about in this New Zealand tax guide for travellers. In New Zealand, goods and services tax (GST) is a tax added to the price of most goods and services, including imports, and is charged at the standard rate of 15%.
If making taxable supplies is not the principal purpose of the good or service, you cannot claim any GST. If the principal purpose of the good or service is for making taxable supplies, you can claim the full GST amount. 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.
Requested and approved refunds are paid into a business’s bank account within 15 days. Non-resident GST-registered businesses will not need a New Zealand bank account to receive their refund. You can only claim GST on goods and services to the extent they’re used in accounting coach cash flow statement your taxable activity to make taxable supplies. You cannot claim GST for supplies you use privately or to make exempt supplies.
Missing a New Zealand GST return deadline will result in a fine of NZ$250. Non-resident businesses that sell low-value imported goods — a physical good valued at NZD 1,000 or less — in New Zealand may need to register for, collect, and return GST. Imported goods valued over NZD 1,000 have GST and customs duties charged at the border by the New Zealand Customs Service. On 1 October 2016, the taxation of digital (‘remote’) services supplied by offshore companies (non-New Zealand) to consumers based in New Zealand changed. Once registered for GST, businesses must charge GST to their customers and pay anything that is owed to the New Zealand Inland Revenue. Businesses must also file GST returns at a frequency determined by its sales figures.
The Goods and Services Tax (GST) in New Zealand
This is similar to VAT, and based on the OECD’s standard indirect tax regime model. It is one of the most progressive regimes in the world, with a wide base and limited exemptions. Our handy online tool will help you decide on the records you need to keep when you buy or sell goods or services.
As a GST-registered business, you can claim back the GST you’re charged on goods and services you buy and use in your taxable activity. For GST-registered businesses, a GST return is due by the 28th of the month after the end of the taxable period. However, if the reporting period ends on November 30, the return and payment must be submitted by January 15 of the following year. The new rules replace the requirement to use tax invoices with a more general requirement to provide and keep certain records known as taxable supply information. The new rules set out the minimum set of records required to support the figures in your GST returns.
Registration is also mandatory if a business charges GST for the goods or services sold. Under certain conditions, backdating a GST registration may be possible upon contacting the Tax Authorities. Xero is a cloud-based accounting software that can help you manage a guide to t-accounts: small business accounting your GST easily and efficiently.