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.
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- GST can be filed on a monthly basis, two-monthly basis, or six months basis and to account for sales and purchases payment receipts, invoices and a mix of the two can be used.
- 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.
- Afirmo makes it easier for you to balance the time you spend managing your business admin versus working in your business.
- Goods and services tax (GST) is New Zealand’s consumption tax.
- In simple words, in any taxable activity, a business pays as well as collects GST during various transactions and should keep a record of these for GST returns.
Part of the registration process involves choosing how often you’ll file your GST returns. In most cases, this means choosing two-monthly or six-monthly. Only businesses with sales of more than $24 million have to file GST returns every month.
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.
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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 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.
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.
Then you’ll need to know the IRD number of the person or company you are registering; your bank account number for GST refunds; business turnover (total sales) in the last 12 months; and expected turnover for the next journalizing accounting entries! trivia questions quiz 12 months. You’ll also have to enter a BIC (business industry classification) code. However, sometimes it’s not added and the price list mentions the price plus GST (+GST) to indicate an added charge of 15% will be added to the displayed price.
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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 tips for writing your first grant letter of inquiry loi 2015 on 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 have worked in New Zealand as part of a working holiday visa, student visa, work visa or for whatever reason, you are entitled to a tax return (tax refund) on some of the taxes that were deducted from your wages. 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. You might struggle to see where you sit with GST if you sell by auction or lay-by, sell secondhand goods, or lease goods. In these cases, it’s worth checking out the IRD page on special supplies.
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 which institutes is called a borrower as well as a lender 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.