If you’re an individual, the $60,000 threshold applies only to the income you earn that isn’t liable to PAYE. For example, if you do $15,000 worth of freelancing on top of a salary that has PAYE applied to it, you don’t have to register for GST.
- To understand them all, it’s best to refer to the IRD web-page about zero-rated supplies.
- 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 12 months.
- If you provide services to a customer as an independent contractor, or work through a labour hire or temping company, they usually have to deduct withholding tax from the payment made to you and forward it to Inland Revenue.
- If you’re a non-resident business that sells low value goods such as clothing, cosmetics and electronic items to consumers in New Zealand, you may need to register for, collect and return GST.
- Established in 1986, the Goods and Services Tax (GST) is a tax on almost anything you purchase in New Zealand.
Filing Frequency for GST in New Zealand
On 1 October 2016, the taxation of digital (‘remote’) services supplied by offshore companies (non-New reseponsive grants Zealand) to consumers based in New Zealand changed. Goods and services tax (GST) is New Zealand’s consumption tax. 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. These are the taxes you might be expected to pay as a tourist or international visitor to New Zealand, which we will go into more detail about in this New Zealand tax guide for travellers.
GST exemptions
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. Afirmo makes it easier for you to balance the time you spend managing your business admin versus working in your business.
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The benefit of being registered for GST is that you may be able to claim GST back on goods or services you purchased if they are genuine business expenses. If you register for GST, you’re obliged to charge an extra 15% on top of your normal prices. So, if you’re a service business that charges $90 an hour, being registered for GST means you’ll have to charge $90 + 15% ($103.50 an hour). And if you’re a manufacturer who makes widgets that sell for $50, you need to add 15% GST.
Online marketplace operators (resident or non-resident for tax purposes), who provide listed services, must collect and return GST of 15% when the service is performed, provided, or received in New Zealand. This will apply whether the seller is GST-registered or not. GST you paid on eligible business expenses is subtracted from the GST you collected on sales. Once you’ve logged in to myIR, you need to select the option within your profile to ‘Register for a new tax account’.
GST-registered businesses don’t have to pay GST on services or subscriptions from overseas suppliers. It’s added to the price you paid for the goods plus shipping costs, and you may have to pay it before customs will release the shipment. You can zentrepreneur life generally claim the cost back when submitting a GST return.
What goods and services are GST-exempt?
In other words, any entity i.e., business, trade, etc. that is registered under the government is liable to pay tax on any taxable activity with a turnover of $60,000 in the 12 months period. It is advisable for all business entities and companies to register no matter if it’s a small business or a big company. A GST-registered business can apply the GST NZ rate when buying and selling sales tax definition goods and services (including imported products) so they comply with tax returns and pay taxes to the government on the GST due dates.
If you’ve never done this before, you’ll start by registering for myIR. Registering for myIR requires you to have your IRD number handy, along with all the usual identification information. You pay a 15% goods and services tax (GST) on most of your purchases in New Zealand.
The most common zero-rated situations relate to international transactions for selling and buying goods or services. Basically, a record of all the buying and selling must be kept meticulously during the GST periods so any inconsistencies and tax irregularities can be avoided. In the GST return form, all records must be present along with the documentation. You don’t have to charge GST on exports, which includes products you sell on the internet to overseas customers. You may not realise it, but an arrival and departure tax is added to the cost of your flight or cruise ticket to and from New Zealand.