What is GST? GST Guide

And if they’re all you sell, then you can’t register for GST. While you don’t collect any GST when the rate is 0%, you do need to report the sales on your return. If your accounting software allows you to file your return directly with us, you can do this. 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 dormant account definition the taxation of digital goods. 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.

If you buy something from a supplier who is not GST registered, the price would not include GST so there’s no GST for you to claim back on that purchase. Now that you got basic information about GST, registered for a GST return if you haven’t and establish your business. And as a registered business always remember when is GST due, if possible, note GST dates in your calendar so you can file on time.

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However, some businesses will write a price and mention “+ GST,” which means that you should add the GST to that price to determine the total price. This is pretty rare but still happens in some trade and wholesale retailers and services, so keep an eye out. The GST rate is 15% which is applied to all goods and services. Some rare services are exempt from GST and duty-free will offer items tax-free when landing in New Zealand from an international flight. For example, if you claim on a television you supposedly bought for the business, but it lives in your living room at home, you’re not being honest, and you could be penalised if found out. If you’re not sure if an expense is truly business-related, it might be a good idea to talk to an accountant about eligible expenses for your line of work.

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Travellers arriving on a cruise ship are charged a Customs levy of NZ$11.48 and a biosecurity levy of NZ$10.58. Travellers departing on airlines or private craft are charged a Customs levy of NZ$4.52 and a Border Clearance levy of NZ$2.94. Travellers arriving on airlines or private craft are charged a Customs levy of NZ$16.59 and a biosecurity levy of NZ$16.92.

What goods and services are GST-exempt?

The tax t deducted on schedular payments is withholding tax. A GST return is a declaration of GST you have collected for a defined period and the GST you have paid when making business purchases. Once you’re registered for GST, you’ll need to file regular GST returns and pay GST on your taxable activities. Xero does not provide accounting, tax, business or legal advice. This guide has been provided for information purposes only.

1. However, some businesses will write a price and mention “+ GST,” which means that you should add the GST to that price to determine the total price.
2. If you earn over $500,000 per year, you can’t choose the six-monthly filing option.
3. GST you paid on eligible business expenses is subtracted from the GST you collected on sales.
4. If your accounting software allows you to file your return directly with us, you can do this.
5. If you’re unsure about whether your business needs to register, you can contact us or your tax agent.
6. Unfortunately for tourists, there are quite a few taxes to juggle when visiting New Zealand.

For example, if you collected $500 GST on your sales for the period and you paid $100 GST on business-related purchases for the same period, the amount of you need to pay to the IRD will be $400. When GST is due and a business need to file and pay the 15% tax, the following documents and procedure can be followed depending on each company, business type, and amount of revenue generated. First of all, businesses must bear in mind how GST is calculated i.e., documentation that shows transaction details during a GST period and have everything ready by GST return dates. If you provide a listed service such as ride-sharing and ride-hailing, food and beverage delivery, or short-stay and visitor accommodation there are changes from 1 April 2024.

As per the regulations, any business, trade, and company selling and buying goods and services must be registered for GST in New Zealand. It is applicable if and when the revenue of a business or company in the previous 12 months is $60,000 or the anticipated revenue is $60,000. Generally, the displayed price on products and services in New Zealand is GST inclusive i.e., a 15% tax is added to the product price. No one wants to hear about the extra the difference between the general ledger and trial balance fees or taxes they might have to pay anywhere in the world. Unfortunately for tourists, there are quite a few taxes to juggle when visiting New Zealand. As many taxes are included in the price, you’ll hardly notice that you’re paying the extra percentage.

GST-registered businesses submit the GST to the Inland Revenue Department. The GST periods differ depending on the size of the company and the amount how to calculate your debt of sales during a certain period. With GST, there are things called ‘zero-rated supplies’, which aren’t subject to GST. To understand them all, it’s best to refer to the IRD web-page about zero-rated supplies.