Goods & Services Tax (GST)
Goods and Services Tax (GST) is a tax collected from the goods and services you buy in New Zealand. GST is added to the price of taxable goods and services at a rate of 15%, which is then passed on to Inland Revenue.
How does GST work?
GST is collected on behalf of the government. As a business or sole trader you charge GST in your sales and income and claim it back for your purchases and expenses. You then calculate the difference in your GST return. Your GST return will determine if you have to make a GST payment to Inland Revenue or if your receive a GST refund from Inland Revenue.
Should I register my business for GST?
You must register for GST if you carry out a taxable activity and if your turnover was over $60,000 for the last 12 months, or is expected to go over $60,000 for the next 12 months. You should also register if your turnover is less than $60,000, but you include GST in your prices, for example taxi drivers who have included 15% in their taxi fares.
You can choose to register for GST even if your annual turnover is less than $60,000. This is referred to as voluntary registration. If you register for GST, you must charge your customers GST and file a GST return which can be done either on a one, two, or six-monthly basis.
WE Accounting provide GST preparation and filing services. It can be included in one of our monthly accounting plans or done as a separate service either monthly, two monthly or six monthly. Using WE Accounting to do your GST saves you time, and ensures you claim back GST on all the business expenses that you are allowed to claim for.