Brief overview of Goods & Services Tax (GST)

GST is a tax on the supply of goods & services in New Zealand by a GST registered person on any taxable activity that they conduct out. The current rate for GST is 12.5%, although it may be zero-rated for exports.

Some supplies of goods and services are ‘exempt supplies’ and may include:

>  Some financial services

>  Sale proceeds or rent from residential properties

>  Salaries & wages and nearly all Directors’ fees

GST registration will be compulsory if your business’ annual earnings/income for a 12-month period exceeds (or if you estimate that it will exceed) $60,000. 

Generally, you can choose whether to file yoru GST returns on a monthly, bi-monthly or 6-monthly basis.  There are certain requirements about who should or can file monthly GST returns and who may file 6-monthly GST returns.

There are 3 methods to account for GST:

Invoice basis

Cash basis

Hybrid basis

If your revenue exceeds $2million you are not permitted to use the Payments basis alternative.

If you’re selling or are considering selling your services or goods via your website, please refer to the IRD’s section on GST & E-Commerce.

For additional information on GST & how you can register, please call us or visit the IRD’s website.

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