GST rate New Zealand Government

new zealand gst

2.19 Government revenues pay for important public services such as education, healthcare, roads and superannuation. Given that over thirty percent of total tax revenue is collected from GST, an increasing gap in that revenue base becomes a concern for everyone who relies on these services. A shortfall in GST revenue may eventually have to be paid for by tax increases or spending cuts. In providing taxable supplies, and once GST registered, businesses are obliged to follow various compliance rules, including record keeping. You are not required to register for GST if your business turnover is less than $60,000 per year.

He has now spent over a decade in the New Zealand tourism industry, clocking in more than 600 activities across the country. He is passionate about sharing those experiences and advice on NZ Pocket Guide and its YouTube channel. Robin is also the co-founder of several other South Pacific travel guides. Plus, for more information on work taxes, check out our guide to the New Zealand Work Tax System.

new zealand gst

You will generally only account for GST on your sales in your GST returns.

It is one of the most progressive regimes in the world, with a wide base and limited exemptions. If you are the buyer, you can claim GST on expenses and purchases before paying for them. You can read about when a non-resident is deemed to make a taxable supply in New Zealand in section 8(2) to (4) of the Goods and Services Tax Act 1985. 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. Persons or entities with annual revenue less than $60,000 do not have to register for GST.[6] This threshold has increased three times since the introduction of GST in 1986. GST was introduced in conjunction with compensating changes to personal income tax rates and removal of many excise taxes on imported goods.

How to Send Money from Australia to New Zealand (& Vice Versa)

You cannot claim GST for supplies you use privately or to make exempt supplies. 2.11 Despite these benefits, when GST does not apply evenly, it may bias consumer and business decisions, which could lead to unfair and inefficient outcomes. 2.6 Depending on freight costs, the $60 de minimis roughly equates to a parcel worth $400 if GST is the only duty applying. Cost recovery charges of $49.24[9] also apply to goods above the de minimis threshold stopped at the border.

New Zealand’s GST system, along with other value-added tax (VAT) and GST systems around the world, is based on the destination principle. This means that goods and services are subject to GST when they are consumed in New Zealand. In principle, GST should therefore be applied to all goods consumed in New Zealand, including imported goods, regardless of value. 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. The IVL costs NZ$35 and you will pay this either when you request your NZETA or when you apply for your Visitor Visa.

  1. If you’ve registered for GST, there are a couple of options for how you can determine the amount of GST to collect at checkout.
  2. A) No change if your tax invoice shows the GST exclusive amount, GST amount and the gross amount for the supply.
  3. When you import the goods, you’ll likely be charged GST by Customs as they come into New Zealand.
  4. [6] The key exemptions are supplies of residential accommodation and business-to-consumer supplies of financial services.

If you are not sure whether your business will meet the turnover threshold, but you estimate it might, you can voluntarily register for GST. This option is a good idea if your estimate is close to $60,000 a year (or $5,000 per month), as you can be charged penalties if you fail to register when you are required to do so. You will need to charge GST on your supplies of goods and services and pay it to Inland Revenue. You will also be able to claim back the GST you incur on your business expenses.

Are Your Sales Taxable?

Whatever method you use to collect GST, make sure you store the data appropriately so you remit the proper amount of GST to New Zealand. This process would be messy and prone to problems for most merchants, but if you feel this method is best for your business, then the New Zealand website provides more information. They have also created a helpful video that walks through many questions and scenarios regarding mixed shipments. New Zealand has passed new legislation that impacts overseas businesses selling goods directly to New Zealand consumers. This new law went into effect on December 1st, 2019, and is very similar to the low-value goods law enacted by Australia in 2018.

This is because our GST system is very broad-based – it applies to a wide range of goods and services and there are very few exemptions. When GST applies broadly it ensures that consumer decisions to purchase particular goods or services are not influenced or driven by tax considerations. It is generally levied at a single standard rate of 15%,[5] and there are very few exemptions.[6] Consumption taxes seek to tax consumer spending on goods and services.

TSI is essentially a list of information you need to provide to your GST registered customers. Most of the required GST information should already be included in your tax invoice. TSI is required to be issued within 28 days of a request being received for a TSI.

Shopping Duty-Free: How to Avoid Paying GST in New Zealand

If your business is registered for GST, you can claim back the tax that paid on goods and services that you purchased to produce goods or services as part of your own business. That new piece of GST legislation mirrors similar rules governing the supply of digital services introduced in the European Union (EU) in January 2015 do sales revenues affect the break-even point on the taxation of digital goods. If you are required to collect and remit GST, you will also be required to supply New Zealand customers with an appropriate receipt that notifies them of the GST applied to their order. Collecting GST at checkout on all goods will be the most reasonable method for most ecommerce merchants.

Payment of GST can be handled electronically through the New Zealand Inland Revenue website. There are a number of different payment options available, and you will receive more details on how to pay GST after you register for your GST number, but the process is fairly straightforward. The receipt supplied to your New Zealand customers will also need to meet certain requirements (also explained later). For example, if you are using SCI to correct the address in the TSI, the SCI needs to include a note stating correction to the “address”. The table below compares the required content of a debit note or credit note to the information required for SCI. There are a number of practical issues to note, especially in relation to the boundary issues inherent in the draft rules and the potential systems changes.

The new rules would allow a wider range of invoicing practices to be adopted (e.g., e-invoicing systems). Although the OECD work suggested various options (including educating sellers and information sharing), New Zealand’s draft rules are wide and will be based on a full GST liability model. New Zealand’s closest neighbor, Australia, is opting for an information sharing model, yet to be implemented. Other countries, like Canada, tax platforms in a targeted way (short-term accommodation) and allow certain facilitation fees to be zero-rated. India applies GST to ride shares and food delivery services purchased through apps. You can only claim GST on goods and services to the extent they’re used in your taxable activity to make taxable supplies.

This can simplify business processes and may be the preferred option for many businesses. If you choose to only collect GST on low-value goods, then the information must be itemized so the customs officials know to collect GST on high-value goods at the border. If no information is provided on the invoice, customs officials will default to collecting GST on all products when the combined value is over 1,000 NZD, which may result in double taxation. The first option is much more complicated and not recommended for most ecommerce merchants.

[6] The key exemptions are supplies of residential accommodation and business-to-consumer supplies of financial services. 2.18 While it is difficult to estimate the total revenue foregone resulting from the non-collection of GST on low-value imported goods with certainty, it is clear that the numbers are significant and a growing concern for Government. 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. There are two “tourist taxes” that visitors are expected to pay, one is mandatory for all visitors while the other depends on what type of visa you are on. No, as a visitor, you cannot claim GST back once you have paid for it.


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