What is the Goods and Services Tax?
Should I register my business for GST?
How do I work out my Goods and Services Tax?
What is the Goods and Services Tax? (GST)
Goods and Services Tax (GST) is a tax collected from the goods and services you buy in New Zealand. Providers of goods and services add 15 percent to the price, which is then passed on to the IRD. Prices given in shops usually have the GST included, but when you are getting a quote for any service, make sure it does include the GST so there are no nasty surprises when you pay the bill. If the GST is not included, the business will usually say the price of the product or service is 'plus GST'.
Should I register my business for GST?
You only need to register for GST if you include GST in your prices, or if the value of your supplies of goods and services in New Zealand in the last 12 months was over $60,000. If it is lower than this, you can still register for GST if you want to claim back GST on certain business expenses such as petrol or a computer. The decision is up to you.
If you register, you must charge your customers GST and file a GST return. There are many special types of GST registration for different entities. . For more information visit the Inland Revenue webpage on special GST registration.
GST returns can be made on a one, two, or six-monthly basis. You can find out more about making a GST return on the Inland Revenue GST webpage. Many small business people get an accountant to do their returns for them. Although this will cost you money, the advantages are it saves you time, and ensures you claim back GST on all the business expenses that you are allowed to claim for.
How do I work out my Goods and Services Tax?
Doing this yourself for the first time can be tricky but the Inland Revenue Department has a good website to help you work it all out. Many small business people and 'sole traders' get an accountant to do their GST returns for them, as well as calculating their income and expenses.