Your GST return is due by the 28th of the month after the end of your taxable period. You must file a GST return for every taxable period, even if it is nil. Once a business has received its GST number, it is able to start charging tax on its invoices. It is obliged to comply with the New Zealand GST compliance rules and file regular returns. Non-residents may also register to recover import GST even if they are making no taxable supplies. Premiums paid by employers (including the self-employed) fund insurance for work-related accidents.
New Zealand Goods and Services tax history
In providing taxable supplies, and once GST registered, businesses are obliged to follow various compliance rules, including record keeping. Goods and services tax (GST) is added to the price of most products and services. If you’re GST registered, you can claim back the GST you pay on goods or services you buy for your business.
Who needs to register for GST
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.
- Try checking the spelling of your search or reducing the number of words, or try searching by company number or NZBN.
- If you paid more GST than you collected, you can get a GST refund from us.
- Visa-waiver countries for New Zealand are listed in What You Need to Know About the New Zealand ETA & Visitor Levy.
- If your request is approved, IRD will contact you with a new taxable period.
- Registering for GST is optional for businesses earning less than $60,000 annually.
- If you regularly sell goods or services you might need to charge GST to your customers.
You may need to provide Inland Revenue numbers for the directors and shareholders
FBT also applies to benefits received by an employee from a third party where there is a special arrangement between the employer and the third party. Generally, FBT does not apply to discounted goods or services received by https://www.accountingcoaching.online/what-is-the-meaning-of-a-favorable-budget-variance/ an employee from a third party if the price paid by the employee is not less than the price that would be charged to other groups of people. Businesses must deregister within 21 days of ceasing to provide taxable supplies.
KPMG Personalization
Employers are liable to pay a residual claims levy and an employer levy. The employer levy payable is determined according to the industry or risk classification of the employer and the level of earnings of employees. In summary, while the removal of GST on foods would butter the bread of accountants, its unlikely be an efficient method of reducing the cost of food for individuals and households. If GST was removed from all food, it would result in a significant loss of tax take which would need to be recouped by other methods. From looking at other jurisdictions, the guidelines on the GST treatment of foods are arbitrary in nature and come to distinctions that do not make practical sense.
The GST rate in New Zealand is at 15% on most taxable goods and services, which includes imported goods and services. 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. On 1 October 2016, the taxation of digital (‘remote’) services supplied by offshore companies (non-New Zealand) the difference between fasb and gasb effects on the statement of cash flows to consumers based in New Zealand changed. If you have paid out more GST than you’ve collected, you may receive a refund. When you register for GST you choose how often you file your GST returns (your filing frequency) and how you record your GST (your accounting basis). Employers can pay FBT at either a single rate of 63.93% or use an alternate rate method (whereby benefits are attributed to employees).
You must request and pay for an NZeTA before you travel to New Zealand. There are two ways of paying for the NZeTA and IVL, either through an Immigration New Zealand app or their website. 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. 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. Your software provider can confirm if this filing feature is available as part of their software package.
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. Almost all of the time, businesses will include GST in the price displayed. However, some businesses will write a price and mention “+ GST” which means that you should add the GST to that price to know how much the price is in total. This is pretty rare but still happens in some trade, wholesale retailers and services, so keep an eye out. 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.
Additionally, there are a couple of visitor taxes for New Zealand, such as the NZETA and IVL, that you will have to pay an upfront cost for. There are restrictions on the recovery of input GST, including assets used wholly or partially for private use or in relation to non-taxable services. Before you can work out your GST total, you need to calculate your sales and income and your purchases and expenses.
Even taxpayers who are not required to make any changes need to be aware of these additional options as your suppliers’ invoicing practices may change, which could affect those taxpayers’ business operations. Some large New Zealand and overseas companies, and all FMC reporting entities must submit audited annual financial statements to the Companies Office. Find out how New Zealand law affects the directors and shareholders of your company, and your responsibility to create and maintain accurate company records, report to us and file financial statements. If you’re likely to turn over more than $60,000 per year, you need to register for GST. Registering for GST is optional for businesses earning less than $60,000 annually. We’ll send your BIC to Inland Revenue as part of the tax registration process.
It is one of the most progressive regimes in the world, with a wide base and limited exemptions. When filing a GST return, you have to ensure that you make your payment as well. If you fail to do so, late payment and submission will incur some penalty and interest. During the GST registration process, you are required to fill in the business industry classification code (BIC). Once you have reached the business turnover GST requirement, it’s time for you to register for a GST account. Before you start registering, charging, and collecting GST from your consumers, you need to check whether you meet the GST requirement stated below.
You can also charge GST (15%) on what you sell — this is collecting it on the government’s behalf. Some goods and services have GST charged at 0% — these are called zero-rated supplies and are typically provided to people overseas. Zero-rated goods and services include products or services from New Zealand that are sold overseas, eg exports or some land transactions. OECD jurisdictions such as the United Kingdom, Australia and Canada have regimes where tax is not applied to particular food items.
Creating an account with the Companies Office allows you to complete the majority of your transactions online. It’s free to set up, but fees apply for some transactions, such as filing annual returns. Once your company is registered with the Companies Office, nominate who will have authority to file your annual returns, and update your name, address, constitution, director and shareholder https://www.personal-accounting.org/ details. You can apply for an IRD number for your company, register as an employer and register for goods and services tax (GST) when you incorporate your company online with the Companies Office. There is currently legislation in the works to require international suppliers of goods to collect GST on low-value goods shipped to New Zealand if they ship over $60,000 of goods per year.
Try checking the spelling of your search or reducing the number of words, or try searching by company number or NZBN. You can rest assured as the software will do the work for your tax calculation. Instead of spending a tremendous amount of time on manual tasks, you can have more time for the things you love with Deskera. Remember to file your GST return by the due date even though you have NIL return. You can always write to IRD and state the filing frequency you prefer if the filing frequency didn’t match you. So, you want to know the allocation of GST amount and price of the sneaker exclusive GST, but you do not know how to do so.