Just follow our instructions on how to register for GST in New Zealand. This guide breaks down how to write a business plan and what you need to think about to make your business plan as persuasive as possible. You can find more information about which items are GST-free here. With GST being applied to so many goods, most New Zealand small businesses will likely have some GST obligations.
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 flexible budget formula 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.
GST is a tax added to the price of most goods and services, including imports. No, you don’t need a representative to handle your taxes in New Zealand. Some tentative foreign business owners may hire a tax representative for peace of mind. Taxes can group purchase websites be an intimidating and confusing topic, especially in a foreign language! Yes, New Zealand has an annual sales registration threshold of NZD 60,000, based on local sales. You will generally only account for GST on your sales in your GST returns.
- These are the revenue thresholds at which businesses in New Zealand are required to start collecting and remitting tax.
- This guide breaks down how to write a business plan and what you need to think about to make your business plan as persuasive as possible.
- Make sure we have your correct contact details, bank account and income information.
- Most New Zealanders will immediately recognise the Goods and Services Tax (GST) as the 15 percent tax slapped onto most goods and services provided in New Zealand.
GST rate
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.
Submit the return
From sole traders who need simple solutions to small businesses looking to grow. 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. Make sure we have your correct contact details, bank account and income information. If you’ve been filing nil for a while, check whether you need to cancel your GST registration. 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.
GST invoices in New Zealand
You will also be able to claim back the GST you incur on your business expenses. If you regularly sell goods or services you might need to charge GST to your customers. 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.
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. That new piece of GST legislation mirrors similar inventory management in 2021 rules governing the supply of digital services introduced in the European Union (EU) in January 2015 on the taxation of digital goods. Automate sales tax calculations, reporting and filing today to save time and reduce errors.
Many countries allow tourists, and others making purchases for export, to receive a VAT refund on exiting the country (or make purchases VAT free). While we don’t have data on the New Zealand VAT refund program, more info can be obtained from the Inland Revenue. Most New Zealanders will immediately recognise the Goods and Services Tax (GST) as the 15 percent tax slapped onto most goods and services provided in New Zealand. Discover how to register, calculate and report on the Goods and Services Tax (GST) and how the GST might affect you personally, particularly as a small business owner.
