Yes, New Zealand has an annual sales registration threshold of NZD 60,000, based on local sales. You will need to charge GST on your supplies of goods and services and pay it to Inland Revenue. You will also be able to claim back the GST you incur on your business expenses. Because businesses claim back their input GST, the GST inclusive price is usually irrelevant for business purchasing decisions, other than in relation to cash flow issues. Consequently, wholesalers often state prices exclusive of GST, but must collect the full, GST-inclusive price when they make the sale and account to the IRD for the GST so collected.
Voluntary registration
Consequently, the corresponding income tax for that specific income will accumulate to $14,020 – which amounts to an overall effective tax rate of 20.02% of the entire amount. Non-resident businesses that sell low-value imported goods — a physical good valued at NZD 1,000 or less — in New Zealand may need to register for, collect, and return GST. Imported goods valued over NZD 1,000 have GST and customs duties charged at the border by the New Zealand Customs Service. From April 1, 2024, non-resident online marketplace operators selling listed services — including ride-sharing, food and beverage delivery, and short-stay accommodation — must register for, collect, and return GST when the service is performed, provided, or received in New Zealand. Businesses may be required to register for a New Zealand VAT number or other identifier to enable the government to track and verify VAT tax returns.
If a GST return deadline falls on public holidays or weekends, filing obligations must be business transaction definition and examples chron com completed by the next working day.
If you’re a non-resident business who does not make taxable supplies in New Zealand, you may be able to register for GST as a non-resident business claimant and claim back GST charged on your New Zealand business expenses if you’re eligible. That new piece of GST legislation mirrors similar rules governing the supply of digital services introduced in the European Union (EU) in January 2015 on the taxation of digital goods. They will need their business industry classification (BIC) code, and know which taxable period applies to them and which accounting accounting basis they want. In New Zealand, goods and services tax (GST) is a tax added to the price of most goods and services, including imports, and is charged at the standard rate of 15%. New Zealand has one of the lowest VAT tax rates in the world, charging a maximum VAT rate of 13%.Countries with bookkeeping vs accounting: main differences in 2023 similar VAT rates include Luxembourg with a VAT of 15%, Spain with a VAT of 16% and Mexico with a VAT of 16%.
Listed services
VAT collection is a responsibility of the merchant, and failure to collect and submit the appropriate tax amounts may result in severe penalties. 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.
- National taxes are levied on personal and business income, and on the supply of goods and services.
- For GST-registered businesses, a GST return is due by the 28th of the month after the end of the taxable period.
- Some localities have a minimum purchase price for which a VAT refund can be claimed, or certain purchase types which cannot be made tax-free.
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 material variance you need to know about digital tax laws in New Zealand, whether your customers live in Auckland or Otago. If you’re a non-resident business that sells low value goods such as clothing, cosmetics and electronic items to consumers in New Zealand, you may need to register for, collect and return GST.
Forget taxes
Taxes can be an intimidating and confusing topic, especially in a foreign language! 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. You will generally only account for GST on your sales in your GST returns. You can read about when a non-resident is deemed to make a taxable supply in New Zealand in section 8(2) to (4) of the Goods and Services Tax Act 1985. GST is a tax added to the price of most goods and services, including imports.
Many countries allow tourists, and others making purchases for export, to receive a VAT refund on exiting the country (or make purchases VAT free). While we don’t have data on the New Zealand VAT refund program, more info can be obtained from the Inland Revenue. New Zealand’s consumption tax is called the Goods and services tax (GST),which was introduced in October 1986. If businesses have a turnover of below NZD 60,000, voluntary registration is allowed in New Zealand.
Once you’ve completed all necessary registration processes, you’ll receive a VAT registration certificate within one month. Businesses must account for VAT from the date they submitted their registration application (not from the date they receive their registration certificate). If a business realises that, based on the previously stated registration requirements, it would not have been mandatory for it to register, it may cancel its registration. If you’re unsure about whether your business needs to register, you can contact us or your tax agent. Persons or entities with annual revenue less than $60,000 do not have to register for GST.6 This threshold has increased three times since the introduction of GST in 1986.