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If you buy goods or services from an unregistered person, they will not charge GST. For some special supplies, such as secondhand goods, you may still be able to claim a GST adjustment. You’re likely to be charged GST on most supplies you purchase for your taxable activity. The payments basis is usually the best for cashflow as you are only have to pay GST on your sales when you receive them. Under the GST invoice basis, you need to return the GST on sales before you receive the receipts from your customer or client.
You can use any format or method to provide taxable supply information, if it contains the required information and is easily accessible by Inland Revenue. You can also use eInvoicing, which is a secure way of exchanging invoices electronically between businesses. You can choose to file your GST returns monthly, two-monthly or six-monthly. Most small businesses choose to file two-monthly or six-monthly GST returns. The filing frequency affects how often you must pay or receive what is chart of accounts coa GST, as well as how much paperwork you must do.
GST was introduced in conjunction with compensating changes to personal income tax rates and removal of many excise taxes on imported goods. Additional information may be required based on the value of the supplied goods or services. The GST filing frequency is dependent on the volume of sales made by the business. There are also goods and services that are exempt from GST, such as penalty interest or renting a residential dwelling. The reverse charge mechanism is applicable in New Zealand for imported services and certain other situations. This mechanism requires the recipient of the service to account for New Zealand GST, rather than the supplier.
Adjusting your claim when supplies are put to both business and private use
GST is a tax added to the price of most goods and services, including when do you need joint tenancy imports. Providing services to New Zealand businesses generally does not require a GST registration. You’ll need to estimate and claim only the percentage of GST on the goods and services used for taxable activities.
- The new rules replace the requirement to use tax invoices with a more general requirement to provide and keep certain records known as taxable supply information.
- You cannot claim GST for supplies you use privately or to make exempt supplies.
- This article has been reviewed and approved by Robin, who is the co-founder of NZ Pocket Guide.
- You can review and edit your returns before submitting them online to Inland Revenue.
The New Zealand Electronic Travel Authority (NZETA) and International Visitor Levy (IVL)
Unfortunately for our clients with turnover $2m plus, they are obliged to be registered under the invoice basis. This means they must return the GST on sales they bill for the GST period. However, they also get to claim their GST expenses even though they haven’t paid them. Some business that have high upfront purchasers/costs but take longer to receive payment may also benefit. Foreign companies, with no fixed establishment in New Zealand, providing taxable goods or services to New Zealand customers may be required to GST register as a non-resident. This then requires them to charge GST on relevant supplies, complete periodic GST returns and remit collected taxes.
This cloud-based system calculates the GST for each transaction line individually, based on the tax rate you select. The system also generates your GST returns, based on the accounting basis and filing frequency you choose. You can review and edit your returns before submitting them online to Inland Revenue.
Additionally, there are a couple of visitor how to do bookkeeping for a nonprofit taxes for New Zealand, such as the NZETA and IVL, that you will have to pay an upfront cost for. They will need their business industry classification (BIC) code, and know which taxable period applies to them and which accounting accounting basis they want. When you import the goods, you’ll likely be charged GST by Customs as they come into New Zealand. You can claim this amount back if you’re GST registered and are using the goods solely to make taxable supplies. The IRD imposes a 1% monthly penalty on unpaid amounts and interest charges on outstanding balances.
What can be claimed
He is an expert in New Zealand travel and has tested over 600 activities and 300+ accommodations across the country. You must request and pay for an NZeTA before you travel to New Zealand. There are two ways of paying for the NZeTA and IVL, either through an Immigration New Zealand app or their website.
Non-resident businesses are not required to appoint a local fiscal representative for GST purposes in New Zealand. New Zealand’s GST system is straightforward, with a standard New Zealand GST rate of 15% for almost all goods and services, a reduced rate of 9%, and a 0% GST rate. Travellers departing on airlines or private craft are charged a Customs levy of NZ$4.52. Travellers arriving on airlines or private craft are charged a Customs levy of NZ$16.59 and a biosecurity levy of NZ$16.92. The IVL is said to be “a way for travellers to contribute directly to the tourism infrastructure they use and to help protect and enhance the natural environment”. A business must provide receipts to buyers if they’ve been charged GST.
Visa-waiver countries for New Zealand are listed in What You Need to Know About the New Zealand ETA & Visitor Levy. A limited number of duty-free stores outside of the airports do this, which we outline in our complete guide to Duty-Free Shopping in New Zealand. Almost all of the time, businesses will include GST in the price displayed. However, some businesses will write a price and mention “+ GST” which means that you should add the GST to that price to know how much the price is in total. This is pretty rare but still happens in some trade, wholesale retailers and services, so keep an eye out.