Goods and Services Tax New Zealand Wikipedia

Persons or entities with annual revenue less than $60,000 do not have to register for GST.6 This threshold has increased three times since the introduction of GST in 1986. Access Xero features for 30 days, then decide which plan best suits your business. Estimate a fair and reasonable percentage when you first get the goods or services. It’s a good idea to make a note of your GST return due dates and note them in your calendar.

(Unless the product you’re selling is zero-rated – more on this later). You will generally only account for GST on your sales in your GST returns. Businesses must account for VAT from the date they submitted their registration application (not from the date they receive their registration certificate).

1. GST is a tax added to the price of most goods and services, including imports.
2. GST is 15% flat tax levied on top of whatever you paid for your lawn mower/DIY terrarium kit/gnome lawn ornament.
3. If you provide a listed service such as ride-sharing and ride-hailing, food and beverage delivery, or short-stay and visitor accommodation there are changes from 1 April 2024.
4. But customers are used to paying GST, and should understand that they’re not paying you extra – they’re paying tax they owe to the government.
5. What we don’t recommend doing is absorbing the cost yourself – eg.

GST threshold

You can read about when a non-resident is deemed to make a taxable supply in New Zealand in section 8(2) to (4) of the Goods and Services Tax Act 1985. If businesses have a turnover of below NZD 60,000, voluntary registration is allowed in New Zealand. GST was introduced in conjunction with compensating changes to personal income tax rates and removal of many excise taxes on imported goods. You might struggle to see accounting for a retail store: an ultimate guide for your store where you sit with GST if you sell by auction or lay-by, sell secondhand goods, or lease goods. In these cases, it’s worth checking out the IRD page on special supplies.

If you provide a listed service such as ride-sharing and ride-hailing, food and beverage delivery, or short-stay and visitor accommodation there are changes from 1 April 2024. Online marketplace operators (resident or non-resident for tax purposes), who provide listed services, must collect and return GST of 15% when the service is performed, provided, or received in New Zealand. The main focus of this article is on the GST changes relating to the gig and sharing economy. So if you sell zero-rated products or services to an overseas client, you still need to record GST of $0.00 in your invoice.

Supplying remote services

If they’re invoicing you for under $200, you may now be able to claim GST without having to chase them up for more info. 💡 If you’re GST registered, you’ll also have to provide your clients with “taxable supply information’’, what are expense accounts which has to meet specific requirements. For more information, check out our ultimate guide to invoicing. If you’re a non-resident business that sells low value goods such as clothing, cosmetics and electronic items to consumers in New Zealand, you may need to register for, collect and return GST. You will need to charge GST on your supplies of goods and services and pay it to Inland Revenue. You will also be able to claim back the GST you incur on your business expenses.

If you’re a non-resident and carry on any activity such as a business which involves supplying goods or services in New Zealand over NZ$60,000 a year, you may be required to register for GST. 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. Refunds in New Zealand will not be paid if they’re to be used to pay any other taxes owed. They will also not be paid if the Inland Revenue is waiting for the business to file an overdue GST return or if any information is missing from the application. They will need their business industry classification (BIC) code, and know which taxable period applies to them and which accounting accounting basis they want.

You may need to keep an eye on the ongoing use of the goods and services. If the amount of use changes, you may need to make further adjustments if it’s different to your first estimate. New Zealand is not alone in considering VAT/GST and the gig economy. Generally, GST returns are due on the 28th day of the month after the GST period ends.

GST Guide For Business

This measure would take effect in New Zealand from the 2024 calendar year, with the first information reporting obligations (and exchange) occurring in early 2025. Market forces will dictate how underlying sellers will make supplies in the future and the impact of prices on account of the new rules. When you’re GST-registered, you are required to file GST returns on a regular basis. If you’ve decided to payroll and hr app and online marketplace register for GST, the next step is to actually collect GST from your customers. If your earnings drop below $60k in a 12 month period, or if you registered for GST while under the earnings threshold, and you decide that you no longer want to be GST registered, you can always cancel your GST registration.

How long does it take to register for VAT?

GST is a tax added to the price of most goods and services, including imports. You’ll need to estimate and claim only the percentage of GST on the goods and services used for taxable activities. Our handy online tool will help you decide on the records you need to keep when you buy or sell goods or services. You must keep taxable supply information for any supplies you receive. The amount of GST you claim (input tax) is subtracted from the amount of GST you charge (output tax) to calculate your tax to pay or GST refund. The existing rules bring in annual GST in excess of NZ$300 million ($184 million).