New Zealand GST rates and GST compliance

Keep a record of all your invoices and expense receipts (and keep these records for seven years). Put aside any GST payments you receive to pay to Inland Revenue at return time. Remember — you’re just collecting GST on behalf of the government, and you’ll need to pass on that GST when you do your return. 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. To make a claim for GST under this category you must be paying GST as a result of receiving goods or services in New Zealand.

If you need to make a payment, you can pay by direct debit, credit card or debit card now. If you’ve been filing nil for a while, check whether you need to cancel your GST registration. Whichever business task you’re tackling, we’ve got something to help — online tools, templates, quizzes and more.

Most small businesses choose to file two-monthly or six-monthly GST returns.

So that the GST content was not a deterrent as a cost factor, the New Zealand government decided to allow a refund in these circumstances. In order to register for New Zealand GST, you will need a New Zealand tax file number (called an IRD number). As a non-resident, you are subject to New Zealand’s Anti-Money Laundering and Counterterrorism Financing legislation. Therefore, before you will be allocated an IRD number, you will need a New Zealand bank account. And New Zealand banks are being very hesitant in opening up a bank account for non-residents because of the background checking they are required to do under that legislation.

• Submit your return and make any required payment by the due date.
• 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.
• For many Australian-controlled businesses, having a New Zealand-registered tax agent to prepare and lodge the GST returns will ensure that you don’t fall for the many differences that apply to the different regimes.
• Shortfall penalties and interest can be applied for incorrect positions taken in GST returns.
• These penalties are very punitive, ranging from 20% to 150% of the GST discrepancy.

This means he can claim a refund when he files his monthly GST return with the IRD. This example demonstrates how a business that makes sales but does not receive payment in a given 7 reasons the irs will audit you month can still account for GST paid on expenses incurred during that period. If John has a monthly GST return filing frequency, then that value would be the GST collected total.

GST

For businesses operating in New Zealand, registering for GST with the IRD is mandatory when the turnover exceeds $60,000. However, businesses with lower turnovers can opt for voluntary registration. GST registration is crucial, especially for businesses exporting goods and services, as they can zero-rate their exports.

Indirect tax – New Zealand

Most businesses normally advertised the pricing of goods inclusive of GST in their physical stores or online stores unless stated otherwise. According to the statistic from StatsNZ, the number of enterprises is increasing in New Zealand. There is a total of 557,680 enterprises in New Zealand as of February 2020, an increase of 1.7% from February 2019. Understanding New Zealand GST (Goods and Services Tax) rules and regulations is a must for every organization and business owner.

What is GST?

If you’re GST registered, you can claim back the GST you pay on goods or services you buy for your business. You can also charge GST (15%) on what you sell — this is collecting it on the government’s behalf. If you’re a non-resident and supplying remote services such as digital content to New Zealand residents, You may require to register for GST, and return, GST on these supplies. Registration is required only if your threshold is greater than $60,000 over a year. You’ll generally only account for GST on your sales in your GST returns. In this more detailed example, John has a net GST payable of $50,850 for the period.

New Zealand GST rates and GST compliance

GST is a general Goods, and Service Tax (GST) levied on most goods and services in the country. GST accounts for over 18% of New Zealand’s tax revenue, and the introduction of GST coincided with a reduction in income taxes. The tax initially was a 10% rate but has been increased twice to the 15% that it is today. Most merchants include GST in the listed prices for goods and services. Some service industries like panel beaters are less likely to include GST in repair estimates. If you see a price listed as +GST, GST is not included in the listed price.

How to calculate the GST in NZ?

The difference between the output tax and the deductible input tax in each accounting period will be the amount of GST payable by the business to Inland Revenue. Prior to 1 December 2019, Customs did not collect duty and GST where the total amount payable on any one importation was less than $60 (gross value of good of $400) . From 1 December 2019, New Zealand Customs does not charge GST on items purchased offshore for $1,000 or less. This is because offshore suppliers (as well as market places and re-deliverers) supplying goods valued at or below NZ$1,000 to New Zealand-resident consumers are required to register and return GST on these supplies. The supplier is only required to register if they meet the registration requirements, that is, sales or expected sales of $60,000 to New Zealand customers in any 12-month period. Therefore, GST is not collected on imports below $1,000 where a remote seller falls below the threshold and does not voluntarily register.