If you are an Australian business considering expanding into New Zealand, it is important to understand the local tax system. One key element is the Goods and Services Tax (GST), which is a value-added tax levied on most goods and services sold in New Zealand. If your company is required to register for GST in New Zealand, here is what you need to know.
Who needs to register for GST in New Zealand?
If your Australian company is selling goods or services to New Zealand customers and your total sales exceed NZ$60,000 per year, you will need to register for GST in New Zealand. This is the same threshold that applies to New Zealand businesses. It is important to note that this threshold is based on your New Zealand sales only, not your global sales. You can also register for GST voluntarily even if your total sales do not reach the NZ$60,000 threshold.
If your business is not making supplies to end consumers in New Zealand, Section 54B of the Goods and Services Tax Act 1985 allows you to register for GST and recover GST input tax on tax on goods and services acquired in New Zealand if you meet certain conditions.
How to register for GST in New Zealand?
To register for GST in New Zealand, you can apply online through the Inland Revenue Department (IRD) website or complete a paper application. You need to apply for an IRD number before registering for GST. The IRD number is a unique identifier assigned to businesses operating in New Zealand and is required for all tax-related transactions.
During the registration process, you’ll need to provide details about your business, such as your business name, the nature of your business, and your estimated turnover in New Zealand. You’ll also need to provide details about your New Zealand bank account, as GST refunds are paid directly into this account. You can also choose filing period of the GST returns (monthly, two-monthly or six-monthly) and the accounting basis (payment, invoice or hybrid).
How to manage GST in New Zealand?
Once you are registered for GST in New Zealand, you will need to charge GST on your sales to New Zealand customers at a rate of 15%. You will also be able to claim back GST on any business expenses you incur in New Zealand, such as rent, utilities, and supplies. To do this, you will need to keep accurate records of your New Zealand business activities, including invoices, receipts, and bank statements.
If you’re unsure about any aspect of the registration and filing process, please contact our office.