This amount can be offset against the $54,750 GST collected total to determine the net GST payable. With Deskera, you can easily apply the New Zealand GST tax rates to your transactions and generate a proper sales invoice. This rule does not apply to you if your taxable period ends on 31st March and 30th November. If your taxable period ends on the 31st March, then your due is on the 7th May, whereas the latter falls on 15th January. The table below compares the required content of a tax invoice to the information required for TSI.
- One important thing you must not forget is the payee code, which shows the type of tax the payment is for.
- A ‘remote’ service is defined as a ‘service where, at the time of the performance of the service, there is no necessary connection between the physical location of the recipient and the place of physical performance’.
- You must file a GST return for every taxable period, even if it is nil.
- A registered person will incur late payment penalty of 1% of their underpaid GST obligation on the first day after the due date, and a 4% incremental penalty on the seventh day after the due date.
- GST must be charged on a supply of goods or services in New Zealand by a registered person in the course or furtherance of a taxable activity carried on by that person – this is referred to as output tax.
You can only file using your myIR account or manual filing if you are using the ratio option to compute your provisional tax. Once you have your account set-up, you can make payment anytime, anywhere. startup cpa One important thing you must not forget is the payee code, which shows the type of tax the payment is for. When filing a GST return, you have to ensure that you make your payment as well.
The New Zealand Electronic Travel Authority (NZETA) and International Visitor Levy (IVL)
Unlike other indirect taxes, such as GST, once duty has been paid it is not recoverable by the importer. She collected $2,850 in GST through her design services but also paid $330 in GST on business-related expenses. This means, for her May operations, Sarah will need to remit $2,520 to the New Zealand Inland Revenue Department (IRD) as part of her GST return.
- GST does not need to be charged if the service is provided to a New Zealand GST – registered businesses unless the supplier and recipient agree otherwise, in which case the supply will be zero-rated.
- You can also charge GST (15%) on what you sell — this is collecting it on the government’s behalf.
- Non-resident remote service providers must file their GST returns quarterly.
- For simplicity, let’s consider a base value of $100 in our examples.
- However, there are other specific attribution rules to consider, such as the attribution rules for unclassified benefits.
Late filing penalties are imposed if GST returns are not lodged by the due date. The current penalties per late return are $250 for taxpayers registered on an invoice or hybrid basis and $50 if registered on a payments basis. There are two rates of GST that are applied to goods and services in New Zealand; standard rate and zero rate.
New Zealand GST
All GST returns have to be submitted by the 28th day of the following month, together with any payment. The exceptions to this rule are where the period ends 30 November, or 31 March. Returns and payments for these periods are due 15 January and 7 May respectively. If the due date falls on a weekend or public holiday the due date is pushed back to the next business day.
Before you can work out your GST total, you need to calculate your sales and income and your purchases and expenses. The Goods and Services Tax (GST) in New Zealand is a comprehensive value-added tax applied to most products and services. Introduced in 1986 by the Fourth Labour Government, GST initially had a rate of 12.5%. This tax, primarily managed by the Inland Revenue Department, is usually filed every one, two, or six months, depending on the business’s preference. Once a business has received its GST number, it is able to start charging tax on its invoices. It is obliged to comply with the New Zealand GST compliance rules and file regular returns.
Filing GST
B) If your tax invoice does not show the GST amount, you need to ensure GST is calculated at 15% of the gross amount. If GST is not calculated at 15%, you must show the GST exclusive amount, the GST amount, as well as the gross amount. A) No change if your tax invoice shows the GST exclusive amount, GST amount and the gross amount for the supply. © 2023 Grant Thornton International Ltd (GTIL) – All rights reserved. Time of supply arises at the earlier of an invoice being issued or payment being received.
Digital services supplied by offshore companies
You pay a 15% goods and services tax (GST) on most of your purchases in New Zealand. You’ll need to estimate and claim only the percentage of GST on the goods and services used for taxable activities. GST is a tax added to the price of most goods and services, including imports.
How to calculate the GST in NZ?
It also includes a New Zealand citizen who is living overseas if they have been overseas for the last three years. A holder of a New Zealand residence class visa may be an offshore person if they are outside New Zealand and have not been in New Zealand within the last 12 months. New Zealand trusts and companies may also be ‘offshore persons’ if there are significant offshore interests in them. Once registered, you can manage and pay GST online using myGST, a new section of Inland Revenue’s myIR service. Whether you’re a sole trader, contractor, in partnership or a company, as soon as you think you’ll earn more than $60,000 in 12 months, you must register for GST.
Claiming GST
The most common exempt supplies include financial services, residential rent, charitable donations, fines, penalties and interest. FBT also applies to benefits received by an employee from a third party where there is a special arrangement between the employer and the third party. Generally, FBT does not apply to discounted goods or services received by an employee from a third party if the price paid by the employee is not less than the price that would be charged to other groups of people.
GST is a tax on consumption which is applied on the supply of most goods and services. It is also applied to goods upon importation into New Zealand and certain services when purchased from a non-resident. New Zealand imposes an obligation to deduct NRCT on those making contract payments to non-residents in relation to certain contract activities undertaken in New Zealand. Contract activities generally relate to services but also include the granting of a right to use property in New Zealand. The NRCT rate is generally 15% (or 45% for individuals and 20% for companies if the relevant paperwork is not provided). Some contractors are eligible to apply for an exemption or a reduced rate.
Plus, for more information on work taxes, check out our guide to the New Zealand Work Tax System. Travellers departing on a cruise ship are charged a Customs levy of NZ$4.55. Travellers arriving on a cruise ship are charged a Customs levy of NZ$11.48 and a biosecurity levy of NZ$10.58. Travellers departing on airlines or private craft are charged a Customs levy of NZ$4.52.