If you’re unsure about whether your business needs to register, you can contact us or your tax agent. Find out more about low value imported goods or what to do if you get charged GST twice. Submit your return and make any required payment by the due date. If your accounting software allows you to file your return directly with us, you can do this.
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. If you cannot submit your return, or pay on time penalties and interest may apply. You pay a 15% goods and services tax (GST) on most of your purchases in New Zealand. Well, the threshold amount refers to your total sales in the country, during any 12-month period. This can be a calculation of sales in the last twelve months, or a prediction of sales in the next what employee fringe benefits are taxable twelve months — any rolling year-long period, past or future. The period you choose is known as your taxable period or filing frequency.
- There are certain items and categories that are exempt from GST — we call them zero-rated goods and services.
- 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.
- It is usually charged at a rate of 15% by GST-registered persons and is added to the price of most goods and services supplied in New Zealand, including most imported goods and services.
Payment or refund
Zero-rated supplies still have to be recorded on your GST returns. There are certain items and categories that are exempt from GST — we call them zero-rated goods and services. GST credits how to create a cash flow projection are a way to claim back some of the GST that you’ve paid and redirect that money back into your own business — more on this later, though. When you are registered you add GST to your prices and pass the GST on to us. If you need to, you can attach correspondence or receipts to the return before you submit it.
What items are GST-free?
If you need more help or have questions about the information or services on this page, contact the following agency. 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. GST was introduced in conjunction with compensating changes to personal income tax rates and removal of many excise taxes on imported goods. ” Check out our explanation of what a digital product is exactly.
Do you need a local tax representative?
Goods and services tax (GST) is New Zealand’s consumption tax. It is usually charged at a rate of 15% by GST-registered persons and is added to the price of most goods and services supplied in New Zealand, including most imported goods and services. But once your local sales do surpass NZD 60,000, then you may have to register for VAT and comply with all of the New Zealander rules around tax rate and collection, invoices, and filing returns. GST is the consumption tax throughout New Zealand, levied on almost everything sold in the country. There are specific rules around digital products, which you must follow closely to stay tax compliant.
In New Zealand, foreign businesses are expected to file tax returns every quarter. You have 28 days to file and pay after the end of each period. Zero-rated goods and services include products or services from New Zealand that are sold overseas, e.g. exports or some land transactions. Even though your business may pay GST on items, or add GST onto your own goods and services, you may qualify for GST credits for some transactions. Charging and collecting tax is only the first half of staying compliant. The second, and equally important, half is filing returns and paying whatever you might owe to the government.
If your customer is a fellow business, and they’ve provided a valid GST number, then adding and collecting tax isn’t necessary! The buyer will handle tax, via New Zealand’s reverse-charge mechanism. A digital product is any product that’s stored, delivered, and used in an electronic format. These are goods or services that the customer receives via email, by downloading them from the Internet, or through logging into a website. These are the revenue thresholds at which businesses in New Zealand are required to start collecting and remitting tax. Businesses in New Zealand that are required to collect tax will be issued an identification number.
New Zealand GST return periods
Tax identification numbers can be verified with the Inland Revenue, and will follow a certain format. The GST registration number format is Taxable persons use tax registration numbers (IRD number) for GST purposes in the format xx-xxx-xxx; effective from 2008, nine-digit numbers are issued to new GST-registered persons. You might need to register for GST if you sell goods or services. Once you’re registered for taxes, you’re expected to charge 15% GST on every sale to a New Zealander resident. New Zealand’s consumption tax is called the Goods and services tax (GST),which was introduced in October 1986. You will need to charge GST on your supplies of goods and services and pay it to Inland Revenue.
No matter where you live or where your online business is based — if you have customers in New Zealand, you gotta follow New Zealander GST rules. This guide includes everything you need to know about digital tax laws in New Zealand, whether your customers live in Auckland or Otago. This will be reflected in how to calculate payroll tax liabilities the sales price of your products or services sold to both consumers and businesses. On 1 October 2016, the taxation of digital (‘remote’) services supplied by offshore companies (non-New Zealand) to consumers based in New Zealand changed. When you make a taxable sale of more than $50.00 (including GST), your GST-registered customers will need a tax invoice from you to be able to claim GST credits for their own businesses. As a GST-registered business, issuing tax invoices, collecting GST from customers and sending information to IR can be a bit of a handful.
