The table below compares the required content of a debit note or credit note to the information required for SCI. The lone exception to this is the first period, which is a length of four months (December 1st, 2019 to March 31st, 2020). accounting software auto repair shop You will have until the 28th of the month following the end of the quarter to remit GST except for Q1, which has a deadline of May 7th. Payment of GST can be handled electronically through the New Zealand Inland Revenue website.
- If your business is registered for GST, you can claim back the tax that paid on goods and services that you purchased to produce goods or services as part of your own business.
- The receipt supplied to your New Zealand customers will also need to meet certain requirements (also explained later).
- 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.
- The amount of GST you claim (input tax) is subtracted from the amount of GST you charge (output tax) to calculate your tax to pay or GST refund.
- 2.9 Given the nature of the current methods of collecting GST on imported goods, the growing volume of imported goods has meant the cost of collecting GST on these goods, and the GST revenue foregone, have both increased.
As a GST-registered business, you can claim back the GST you’re charged on goods and services you buy and use in your taxable activity. You are not required to register for GST if your business turnover is less than $60,000 per year. Further, even if you exceed this threshold, you may be exempt if your business provides financial services, donated products and services and private home rentals. Although the OECD work suggested various options (including educating sellers and information sharing), New Zealand’s draft rules are wide and will be based on a full GST liability model.
If you are required to collect and remit GST, you will also be required to supply New Zealand customers with an appropriate receipt that notifies them of the GST applied to their order. If your business is below the 60,000 NZD threshold, then you do not need to do anything. Duty, GST, and fees will be collected at the border on shipments over 1,000 NZD or for any shipments with alcohol and tobacco of any value. For most merchants, this will actually result in an increased number of shipments that will clear duty and tax-free. When you import the goods, you’ll likely be charged GST by Customs as they come into New Zealand.
Robin is also the co-founder of several other South Pacific travel guides. © 2024 KPMG LLP, a Delaware limited liability partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. If you regularly sell goods or services you might need to charge GST to your customers. You account for GST at the end of the taxable period that you make or receive the payment in. Prices shown in shops and online include GST unless they say otherwise — the GST part of what you’ve paid is printed on your receipts.
Payment or refund
This may seem a little confusing, so keep reading and we’ll explain this in more detail. Prior to December 1st, 2019, New Zealand customs collected duty and tax at the border when the amount of duty and tax due on the shipment is greater than 60 NZD. When New Zealand collects duty and taxes at the border, they also assess an import transaction fee and MPI levy, which equals a combined amount of 55.71 NZD in addition to the duties and taxes. This gets expensive for an online shopper and is part of an archaic system designed before cross-border ecommerce was relevant. 2.26 The success of an offshore supplier registration system to collect GST on cross-border services and intangibles illustrates that such a system is effective and relatively easy to comply with.
How do you work out the GST amount of a price?
This is because our GST system is very broad-based – it applies to a wide range of goods and services and there are very few exemptions. When GST applies broadly it ensures that consumer decisions to purchase particular goods or services are not influenced or driven by tax considerations. It is generally levied at a single standard rate of 15%,[5] and there are very few exemptions.[6] Consumption taxes seek to tax consumer spending on goods and services. New Zealand’s GST system, along with other value-added tax (VAT) and GST systems around the world, is based on the destination principle. This means that goods and services are subject to GST when they are consumed in New Zealand.
2.4 GST on imported goods is currently collected by Customs at the border. However, GST is not collected if the total duty value (including GST, tariffs and other duties) is less than $60. You’ll need to estimate and claim only the percentage of GST on the goods and services used for taxable activities.
New Zealand’s GST system
GST-registered businesses don’t have to pay GST on services or subscriptions from overseas suppliers. TSI needs to include the date of the invoice, or if invoice is not issued, the “time of supply”. For GST purposes, an invoice is a document notifying the obligation to pay.
Since the duty on the clothing is only $26.50 (comprising tariff duty of $10 ($100 x 10%) and $16.50 of GST ($110 x 15%), Melissa’s purchase is below the current de minimis threshold. She is not required to pay any duties to Customs on the active wear she purchases from offshore. You can only claim GST on goods and services to the extent they’re used in your taxable activity to make taxable supplies. You cannot claim GST for supplies you use privately or to make exempt supplies.
If you provide a listed service such as ride-sharing and ride-hailing, food and beverage delivery, or short-stay and visitor accommodation there are changes from 1 April 2024. Online marketplace operators (resident or non-resident for tax purposes), who provide listed services, must collect and return GST of 15% when the service is performed, provided, or received in New Zealand. You may choose (for simplicity’s sake) to intentionally collect GST on all orders to New Zealand, including sales to GST-registered businesses.
This is usually 15%, however, it may be “zero-rated” at 0% in certain circumstances. 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. Please note the comments above are for ordinary transactions subject to GST. Different rules may apply to imported goods or services, or acquisitions from non-GST registered person.
You will be asked to enter your BIC (business industry classification) code when you register. When you register with the IRD, you https://quickbooks-payroll.org/ need to regularly file a return. But before you do so, you need to make sure that you have calculated everything correctly.
2.9 Given the nature of the current methods of collecting GST on imported goods, the growing volume of imported goods has meant the cost of collecting GST on these goods, and the GST revenue foregone, have both increased. If making taxable supplies is not the principal purpose of the good or service, you cannot claim any GST. If the principal purpose of the good or service is for making taxable supplies, you can claim the full GST amount. You may not realise it, but an arrival and departure tax is added to the cost of your flight or cruise ticket to and from New Zealand. The arrival and departure tax for New Zealand, also known as “border processing levies”, is a fee to pay for the Customs and Biosecurity procedures you go through upon arrival and departure. There is no upfront cost to pay for these fees, they are included in the cost of your travel ticket.
Estimate a fair and reasonable percentage when you first get the goods or services. There are 2 ways to adjust your claim, the apportionment method and the principal purpose method. Plus, for more information on work taxes, check out our guide to the New Zealand Work Tax System. 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”.