Goods and Services Tax 

Goods and services tax (GST) is a tax on the supply of most goods and services in New Zealand, most imported goods and certain imported services.  It is a tax that you collect on behalf of the government.  You charge GST on your sales and income and claim it back for your purchases and expenses.  You then calculate the difference in your GST return to work out if you have to make a GST payment to the Inland Revenue Department (IRD) or whether you will receive a GST refund.

You are required to register for GST with the IRD if your business annual turnover for a 12 month period exceeds or is expected to exceed $60,000.  You can choose to file GST returns on a monthly, two monthly or six monthly basis and can account for your income and expenses on an invoice basis, a payments basis or a hybrid basis. 

Returns can be filed electronically using the IRD’s IR File system and payments can either be made by internet banking or cheque.

If you are selling or are thinking of selling your products through your website, please also refer to the IRD website on GST and E-Commerce.

What are taxable goods and services:-

v  Goods include all types of personal and real property, except money;

v  Services cover everything other than goods or money eg TV repairs, doctor’s services and gardening services;

v  Taxable goods and services are part of the business or taxable activity.  This means you supply or receive taxable goods and services for a consideration (money, compensation, reward) but not necessarily for profit.  Taxable goods and services are referred to as “taxable supplies”.

Taxable goods and services don’t include:-

v  Goods and services supplied by businesses that aren’t registered for GST;

v  Exempt supplies including:-

-         Letting or renting a dwelling for use as a private home;

-         Interest you receive;

-         Donations;

-         Certain financial services including bank fees and interest on loans and hire purchases.

Before 1 October 2010, the GST rate is 12.5%.  The GST portion to be added to a figure is calculated by multiplying the figure by 12.5% and the portion of GST already included in a figure is calculated by dividing that figure by 9.

From 1 October 2010, the GST rate is 15%.  The GST portion to be added to a figure is calculated by multiplying the figure by 15% and the portion of GST already included in a figure is calculated by multiplying the figure by 3 then dividing by 23. 

When you are registering for GST, we can help you choose which method is best suited to your business or for further information visit the IRD website.


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