You must keep a record of all your invoices and expense receipts (and keep these records for seven years). You also must keep a record of any adjustments you make for business, private and exempt use of goods and services. Businesses may submit their GST returns electronically through either myIR or an accounting software. Paper filing is also permitted, if the business does not have a myIR account, the Inland Revenue will provide them with the paper return.
GST New Zealand Guide
Expanding your business to New Zealand requires an understanding of its VAT system, known locally as Goods and Services Tax (GST). This guide delves into the nuances of the New Zealand GST framework, providing you with the knowledge needed to successfully navigate this aspect of doing business in New Zealand. Tipping is not mandatory or expected in New Zealand, but it will be appreciated if you tip to reward exceptional service. Established in 1986, the Goods and Services Tax (GST) is a tax on almost anything you purchase in New Zealand. It is an inherent part of your trip here, whether you notice it or not.
Filing deadlines
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. If a business (’principal’) carries out a supply to the customer via an agent, it is regarded as a direct sale between the principal and the customer. The same rule applies to purchases – if the principal purchases goods or services using an agent, the transaction is considered to be made between the seller and the principal, not the agent.
- No one wants to hear about the extra fees or taxes they might have to pay anywhere in the world.
- The Inland Revenue is responsible for the administration of the goods and services tax in New Zealand.
- If a business (’principal’) carries out a supply to the customer via an agent, it is regarded as a direct sale between the principal and the customer.
Because GST is a tax on all goods and services, it will be applied to almost everything you purchase in New Zealand. That includes food, medication, equipment, going to the hairdressers, the doctors and even major types of expenses in accounting the activities you are likely to do as a traveller in New Zealand. We also go over whether it is necessary to tip in New Zealand, as well as advice for international travellers paying taxes for working in New Zealand. Once GST registered, businesses can manage and pay GST online using myGST — a section of the New Zealand Inland Revenue’s online service.
Get in touch with our VAT experts about your Accounts Payable Invoices today.
If you’ve bought goods from overseas, the supplier probably will not charge you GST unless they carry on a taxable activity in New Zealand. 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. Appointing a tax representative is not mandatory for non-resident businesses. This article has been reviewed and approved by Robin, who is the co-founder of NZ Pocket Guide. With more than 15 years of experience in the New Zealand tourism industry, Robin has co-founded three influential tourism businesses and five additional travel guides for South Pacific nations.
The general invoice rule is that the tax point is the earlier of the date of the supply or the invoice date. Businesses operating in New which financial statement is the most important Zealand must register for GST if they have a turnover of more than NZD 60,000 in the previous 12 months, or expect to exceed this threshold within the next 12 months. New Zealand introduced a Goods and Services Tax (‘GST’) on 1 October 1986.
In New Zealand, the GST registration threshold for both resident and non-resident businesses is NZ$60,000 in annual turnover. If your company’s taxable turnover exceeds this amount, you must register for New Zealand GST. Businesses with turnover below this threshold can opt for voluntary registration, adjusting entry example: prepaid rent enabling them to recover any input GST they may be due. No one wants to hear about the extra fees or taxes they might have to pay anywhere in the world. Unfortunately for tourists, there are quite a few taxes to juggle for visiting New Zealand. As many taxes are included in the price, however, you’ll hardly notice that you’re paying the extra percentage.
Some rare services are exempt from GST and duty-free will offer items tax-free when landing in New Zealand from an international flight. 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. If a business realises that, based on the previously stated registration requirements, it would not have been mandatory for it to register, it may cancel its registration. If businesses have a turnover of below NZD 60,000, voluntary registration is allowed in New Zealand.
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. Estimate a fair and reasonable percentage when you first get the goods or services. There are 2 ways to adjust your claim, the apportionment method and the principal purpose method.
If a business realizes that, based on the above registration requirements, it would not have been mandatory for them to register, they may cancel their registration. To register for New Zealand GST, businesses can apply online through the Inland Revenue Department (IRD) website. The process is relatively straightforward, and businesses will receive a New Zealand GST number upon successful registration. The IVL applies to all visitors with a passport from either a visa-waiver country or a country where you have to apply for a visitor visa to visit New Zealand. The IVL costs NZ$35 and you will pay this either when you request your NZETA or when you apply for your Visitor Visa. There are two “tourist taxes” that visitors are expected to pay, one is mandatory for all visitors while the other depends on what type of visa you are on.