Indirect tax New Zealand

Once GST registered, businesses will receive a unique GST number, to be added to all tax invoices. If you file a GST return for more than one branch and division, enter total sales and income (Box 5) for all other branches, otherwise enter zero for this section. You can claim GST on your expenses for zero-rated supplies, whereas you cannot claim any expenses for purchases of exempt supplies.

  • Yes, although non-resident businesses are only able to register for GST in New Zealand if their taxable supplies are generated when the time of supply occurs within New Zealand.
  • GST on sales to New Zealand customers is paid to New Zealand’s Inland Revenue but no GST on costs (input tax) may be claimed.
  • There could be other practical implications as a result of the new GST invoicing rules being implemented.
  • The NZ GST Calculator is a tool designed to help individuals and businesses in New Zealand calculate Goods and Services Tax (GST) on their transactions.
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  • You can only file using your myIR account or manual filing if you are using the ratio option to compute your provisional tax.

One benefit of voluntary registration is you might be able to claim a GST refund, eg if you have a lot of expenses but not much income. If you buy goods or services from an unregistered person, they will not charge GST. For some special supplies, such as secondhand goods, you may still be able to claim a GST adjustment. 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.

New Zealand GST rates

From that point, all we have to do is add the new found GST content ($15) to the base figure ($100) to get the new GST inclusive figure of $115. 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.

  • This amount can be offset against the $54,750 GST collected total to determine the net GST payable.
  • GST is charged on the value of the importation, including any customs duty, freight and insurance.It is important to note the interaction between GST and customs duty.
  • This rule does not apply to you if your taxable period ends on 31st March and 30th November.
  • Customs duty is levied on some imported goods at rates generally ranging from 1% to 10%.
  • Almost all of the time, businesses will include GST in the price displayed.

This approach helps in understanding the process of calculating GST for different scenarios. Non-residents may also register to recover import GST even if they are making no taxable supplies. The GST filing date is due on the 28th of the following month after your taxable period.

Business performance

Offshore sellers are also required to register and account for GST at 15% on supplies of low-value imported goods (LVIGs) if sales to New Zealand private consumers in a 12-month period exceed NZD 60,000. The NZD 60,000 threshold is the same GST registration threshold that applies to domestic businesses and offshore suppliers of cross-border remote services. If John has a monthly GST return filing frequency, then that value would be the GST collected total.

Remember — you’re just collecting GST on behalf of the government, and you’ll need to pass on that GST when you do your return. Two-monthly means more paperwork but can be easier to keep track of. Six-monthly filing is only available if your turnover is less than $500,000 (although some exceptions apply), and it might be good if you don’t have a lot of expenses or invoices. On 1 October 2016, the taxation of digital (‘remote’) services supplied by offshore companies (non-New Zealand) to consumers based in New Zealand changed.

TSI is required to be issued within 28 days of a request being received for a TSI. Most GST registered businesses should be able to continue issuing their tax invoices and GST credit notes without making any changes to their systems. The new rules would allow a wider range of invoicing practices to be adopted (e.g., e-invoicing systems). outsource invoicing In any 12-month period, if you’re in business and earn more than $60,000 in turnover from taxable activities, you’ll need to register for GST. This means you’ll charge your clients and customers GST, collect it and send it to us during the tax year. If you don’t think you’ll turn over that much, it’s up to you whether or not to register.

Your GST return and payment due will be on the 28th of the following month, on 28th August. For example, Jenny owns a boutique and her taxable period ends on 30th June. Jenny has at least a month to prepare her GST return and file her tax return.

Even if you are not required to make any changes, you should still be aware of these additional options as your suppliers’ invoicing practices may be changing, which could impact the way you operate your business. A ‘remote’ service is defined as a ‘service where, at the time of the performance of the service, there is no necessary connection between the physical location of the recipient and the place of physical performance’. However, there are some disadvantages and any decision on whether to group register should be carefully considered. For example, all GST group members (including former members) are jointly and severally liable for the GST debt of the group during the period of their membership. ESCT is generally deducted at the employee’s relevant progressive rate based on the total salary or wages and employer superannuation cash contributions paid to the employee in the previous year.

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TSI needs to include the date of the invoice, or if invoice is not issued, the “time of supply”. For GST purposes, an invoice is a document notifying the obligation to pay. Please note the comments above are for ordinary transactions subject to GST. Different rules may apply to imported goods or services, or acquisitions from non-GST registered person.

Everything to Run Your Business

The proposed legislation would require online marketplaces like eBay to collect the tax and not individual sellers. Currently, GST is assessed at customs for goods valued at $400 or more if ordered from an overseas source. New Zealand Customs often batches orders together, so even if it is in separate boxes, you will be charged GST if you receive $400 or more of products in one day. In this example, John has paid $3,900 worth of GST on the necessary items to complete the projects.

However, it’s always good practice to double-check the official government website for any recent changes in the GST rate. Yes, the GST Calculator New Zealand can be used for both adding GST to an amount and subtracting GST from an amount. This makes it a versatile tool for individuals and businesses dealing with various transactions.

More About Taxes in New Zealand

And you may have to pay GST on any payments you collect, even if you haven’t charged it. 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. 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. GST was introduced in conjunction with compensating changes to personal income tax rates and removal of many excise taxes on imported goods.

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