nzd gst Guide for Businesses in New Zealand

As a business owner in New Zealand, navigating the Goods and Services Tax (GST) can be a daunting task. You're required to register for GST if your annual turnover is $60,000 or more.

New Zealand GST is a 15% tax on most goods and services sold in the country. This includes online sales, which can be a significant revenue stream for many businesses.

To register for GST, you'll need to provide your business name, address, and contact information to Inland Revenue. This can usually be done online, and you'll receive a GST number that you'll need to display on your invoices.

Businesses with a GST number can claim back some of the GST they pay on their business expenses. This can help reduce the tax burden and increase profitability.

You don't need to register for GST in New Zealand if your total sales remain below NZD 60,000. This threshold refers to your total sales in the country, during any 12-month period.

To determine if you need to register, calculate your total sales in the last 12 months or predict your sales for the next 12 months. If you exceed NZD 60,000, you'll need to register for GST and comply with tax rules.

You can choose to register voluntarily if your turnover is below the threshold, which can be beneficial if you have a lot of expenses but not much income. Once registered, you'll need to complete regular GST returns.

You'll need the following to register for GST: your IRD number, business industry classification (BIC) code, and to know which taxable period and accounting basis you want.

Here's a quick rundown of the registration process:

To register for GST in New Zealand, you'll need your IRD number and business industry classification (BIC) code. You can find your BIC code on the Business Industry Classification Code website.

You'll also need to decide on a taxable period, which can be monthly, two-monthly, or six-monthly for small businesses. Additionally, you'll need to choose an accounting basis, such as the payment basis, which allows you to pay GST on sales only when you receive the payments.

To register, you can use the myGST service, which is part of Inland Revenue's myIR service. Once you're registered, you can manage and pay GST online.

Here are the required details to register for GST:

Remember, registering for GST is mandatory if your annual turnover exceeds NZD 60,000 or is expected to exceed that amount in the next 12 months. However, you can also register voluntarily if your turnover is below the threshold.

To add GST to an amount, you can multiply the GST exclusive amount by 1.15 to get the GST inclusive price. This is a simple calculation that can be done quickly and easily.

For example, if you have an item priced at $100 and you need to add GST, you would multiply $100 by 1.15 to get a GST inclusive price of $115.

Alternatively, you can flip the calculation to find what the GST portion is that needs to be added. This is done by multiplying the original amount by 0.15, which is the same as dividing by 1.15.

To comply with tax laws in New Zealand, you should include your business name and address, business VAT number, invoice date, invoice sequencing number, description of the goods or services, rate of VAT applied to each item, and total amount including VAT on your invoices to customers.

In New Zealand, GST invoices require specific information to be included. This is not a one-size-fits-all approach, as businesses with a turnover of $2m or more are required to be registered under the invoice basis.

Some purchases, such as wages, bank fees, interest, and loan payments, do not have GST included.

In New Zealand, you'll need to include specific information on your invoices to customers to comply with tax laws.

Your business name and address should be clearly stated on the invoice.

You'll also need to include your business VAT number, which is a crucial piece of information for tax purposes.

The invoice date and invoice sequencing number are also important details to include.

A detailed description of the goods or services being sold should be included on the invoice.

You'll need to specify the rate of VAT applied to each item, so customers know what they're paying.

The total amount including VAT should be clearly stated on the invoice.

Businesses with a turnover of $2m or more are required to be registered under the invoice basis, which means they must return the GST on sales they bill for the GST period.

This can be beneficial for businesses with high upfront costs, as they can claim their GST expenses even if they haven't paid them yet.

Here's a summary of the required information for GST invoices in New Zealand:

Not all purchases have GST, as some businesses are not GST registered. This means you can't claim payments made to them.

Wages are an example of a cost that doesn't have GST in them, along with bank fees and interest payments.

To find the GST amount in a price, you can simply multiply the total price by 3/23. For example, if the price is $115 including GST, the GST portion is $115 * 3/23 = $15.

When you're given a price that includes GST, it's helpful to know how to calculate the GST exclusive price. To do this, divide the price by 1.15. For instance, if the price is $115 GST including GST, the GST exclusive price is $115 / 1.15 = $100.

Most small businesses choose to file two-monthly or six-monthly GST returns, with the former being easier to keep track of but requiring more paperwork.

You can choose to file your GST returns monthly, two-monthly or six-monthly, with the latter only available if your turnover is less than $500,000 and some exceptions apply.

To complete a GST return, you'll need to know your total sales and income, total spending, including purchases and expenses, and the total amount of GST you've charged to customers.

You can pay GST online using Inland Revenue's myIR service, making it convenient to stay on top of your GST obligations.

If you decide to deregister for GST, you still need to keep filing returns. You may have to pay GST on any payments you collect, even if you haven't charged it.

Deregistering for GST doesn't give you a free pass from filing returns. You're still required to submit returns, even if you're no longer charging GST.

To deregister, you need to let Inland Revenue know the date you intend to stop charging GST. This is usually payable on goods and services held at the time you cancel your registration.

You'll need to account for the GST on any business assets you hold at the time you deregister. This includes making an adjustment in your final GST return.

Here are some key things to remember when deregistering:

You'll need to know your total sales and income, total spending, including purchases and expenses, and the total amount of GST you've charged to customers when completing a GST return.

Most small businesses choose to file two-monthly or six-monthly GST returns, which affects how often you must pay or receive GST.

To complete a GST return, you'll need to keep track of your sales and expenses accurately. You can use systems that can help at tax time.

You can choose to file your GST returns monthly, two-monthly or six-monthly, but most small businesses choose to file two-monthly or six-monthly GST returns.

If you don't deregister, you'll still have to keep filing returns, and you may have to pay GST on any payments you collect, even if you haven't charged it.

You can pay GST online using Inland Revenue's myIR service.

Here's a summary of what you need to know: