Understanding Goods and Services Tax (or GST)

GST - Goods and Services Tax is a value-added tax or consumption tax for goods and services consumed in New Zealand. Initially set at 10%, the rate increased to 12.5% in 1989, and settled at 15% since 2010.

Introduced in 1986, Goods and Services Tax (GST) is a value-added tax or consumption tax for goods and services consumed in New Zealand. Initially set at 10%, the rate increased to 12.5% in 1989, and settled at 15% since 2010.

Who needs to register for GST?

Not everyone who has a company, or is in trading or business has to register for a GST. You only register if any of these apply to you:

⇒ your turnover was $60,000 or more in the last 12 months; or

⇒ your turnover will be $60,000 or more in the next 12 months; or

⇒ your prices include GST.

If any of the above apply to you, it's best to register as soon as you think you’ll earn more than $60,000 in a 12 month period, but our advice would be to register earlier so you can claim back GST while your business is still small.

You don't have to register for GST if:

⇒ your turnover was under $60,000 in the last 12 months; or

⇒ your turnover is expected to be under $60,000 in the next 12 months; or

⇒ your turnover exceeds $60,000 because you have sold business assets.

How do I register for my GST?

You can immediately register with us, Accounting4Me. We'll gladly help you through the process. But it'll be good if you already have the following:

⇒ your IRD number.

⇒ your Business Industry Classification (BIC) code.

Note: For sole traders, your GST number will be the same as your IRD number. For partnerships and companies, it is the same as your partnership or company IRD number.

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How do I go about filing my GST returns?

If you're filing for GST returns, you have three options for doing this:

⇒ Monthly - best choice if you're entitled to frequent GST refunds.

⇒ Two-monthly - helps keep you abreast of your GST requirements and lets you stay in touch with your progress.

⇒ Six-monthly - suits if your business has just a few transactions.

Most small businesses use a two-monthly or six-monthly taxable period.

When to file my GST returns?

As per the Tax Calendar, you should file for your GST return by the 28^th of the month following the end of your taxable period. There are two exceptions to this rule. If your taxable period ends on:

⇒ 30^th November, your return and payment will be due on 15^th January of the following year.

⇒ 31^st March, your return and payment will be due on 7^th May.

If the due date falls on a weekend or public holiday, it automatically means it falls on the next working day.

With Accounting4Me, once you've filed your first GST, we will send you email alerts advising you it's time to file.

When is my GST return due?

We'll let you know via email reminder when your GST return is due. This helps avoid interest and penalties. If there are GST refunds due, we will credit it directly to your bank account within 15-20 working days of us receiving your return.

What if I choose to close down my business?

If you close down your business or if your turnover falls below $60,000 a year, all you have to do is just let us know via email.

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