GST goods and services tax

No matter where you live or where your online business is based — if you have customers in New Zealand, you gotta follow New Zealander GST rules. This guide includes everything you need to know about digital tax laws in New Zealand, whether your customers live in Auckland or Otago. This will be reflected in the sales price of your products or services sold to both consumers and businesses. On 1 October 2016, the taxation of digital (‘remote’) services supplied by offshore companies (non-New Zealand) to consumers based in New Zealand changed. When you make a taxable sale of more than $50.00 (including GST), your GST-registered customers will need a tax invoice from you to be able to claim GST credits for their own businesses. As a GST-registered business, issuing tax invoices, collecting GST from customers and sending information to IR can be a bit of a handful.

Charging GST when you sell something

If your customer is a fellow business, and they’ve provided a valid GST number, then adding and collecting tax isn’t necessary! The buyer will handle tax, via New Zealand’s reverse-charge mechanism. A digital product is any product that’s stored, delivered, and used in an electronic format. These are goods or services that the customer receives via email, by downloading them from the Internet, or through logging into a website. These are the revenue thresholds at which businesses in New Zealand are required to start collecting and remitting tax. Businesses in New Zealand that are required to collect tax will be issued an identification number.

If you’re unsure about whether your business needs to register, you can contact us or your tax agent. Find out more about low value imported goods or what to do if you get charged generally accepted accounting principles gaap: definition standards and rules GST twice. Submit your return and make any required payment by the due date. If your accounting software allows you to file your return directly with us, you can do this.

Supplying remote services

Zero-rated supplies still have to be recorded on your GST returns. There are certain items and categories that are exempt from GST — we call them zero-rated goods and services. GST credits are a way to claim back some of the GST that you’ve paid and redirect that money back into your own business — more on this later, though. When you are registered you add GST to your prices and pass the GST on to us. If you need to, you can attach correspondence or receipts to the return before you submit it.

Tax identification numbers can be verified with the Inland Revenue, and will follow a certain format. The GST registration number format is Taxable persons use tax registration numbers (IRD number) for GST purposes in the what is a chart of accounts and is it important format xx-xxx-xxx; effective from 2008, nine-digit numbers are issued to new GST-registered persons. You might need to register for GST if you sell goods or services. Once you’re registered for taxes, you’re expected to charge 15% GST on every sale to a New Zealander resident. New Zealand’s consumption tax is called the Goods and services tax (GST),which was introduced in October 1986. You will need to charge GST on your supplies of goods and services and pay it to Inland Revenue.

1. If your customer is a fellow business, and they’ve provided a valid GST number, then adding and collecting tax isn’t necessary!
2. No matter where you live or where your online business is based — if you have customers in New Zealand, you gotta follow New Zealander GST rules.
3. GST is a tax added to the price of most goods and services, including imports.
4. The second, and equally important, half is filing returns and paying whatever you might owe to the government.
5. When you make a taxable sale of more than $50.00 (including GST), your GST-registered customers will need a tax invoice from you to be able to claim GST credits for their own businesses.
6. There are specific rules around digital products, which you must follow closely to stay tax compliant.

Claiming GST if you do not make taxable supplies in New Zealand

Goods and services tax (GST) is New Zealand’s consumption tax. It is usually charged at a rate of 15% by GST-registered persons and is added to the price of most goods and services supplied in New Zealand, including most imported goods and services. But once your local sales do surpass NZD 60,000, then you may have to register for VAT and comply with all of the New Zealander rules around tax rate and collection, invoices, and filing returns. GST is the consumption tax throughout New Zealand, levied on almost everything sold in the country. There are specific rules around digital products, which you must follow closely to stay tax compliant.

Submit the return

In New Zealand, foreign businesses are expected to file tax returns every quarter. You have 28 days to file and pay after the end of each period. Zero-rated goods and services include invoicing payment terms you need to know products or services from New Zealand that are sold overseas, e.g. exports or some land transactions. Even though your business may pay GST on items, or add GST onto your own goods and services, you may qualify for GST credits for some transactions. Charging and collecting tax is only the first half of staying compliant. The second, and equally important, half is filing returns and paying whatever you might owe to the government.

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