How can GST affect my business?
If you’re a business, you may be required to register for and collect GST. That means:
- you may need to add GST to your prices
- you will need to send that extra money to the IRD
- you can claim back any GST that you’re charged on business supplies
How much is GST?
- 15% is the GST rate for most goods and services
- 0% is the GST rate for exports, and for land that is sold between GST-registered businesses
While you don’t collect any GST when the rate is 0%, you do need to report the sales on your return.
Some goods and services are exempt from GST. Financial services, residential rent, and donated goods sold by non-profits fall into this category.
You should never charge GST on exempt goods or services. And if they’re all you sell, then you can’t register for GST. Learn more on this IRD page.
You might struggle to see where you sit with GST if you sell by auction or lay-by, sell secondhand goods, or lease goods. In these cases, it’s worth checking out the IRD page on special supplies.
How does GST work?
The GST on any item is designed to be paid by the consumer in the end, rather than by the businesses involved in its supply. Take this example:
GST on imports
You will have to pay GST on most imported goods. It’s added to the price you paid for the goods plus shipping costs, and you may have to pay it before customs will release the shipment. You can generally claim the cost back when submitting a GST return.
GST-registered businesses don’t have to pay GST on services or subscriptions from overseas suppliers.
GST on exports
You don’t have to charge GST on exports, which includes products you sell on the internet to overseas customers.
Disclaimer: Xero does not provide accounting, tax, business or legal advice. This guide has been provided for information purposes only. You should consult your own professional advisors for advice directly relating to your business or before taking action in relation to any of the provided content.
Guide to GST
Making a start with GST? Don’t worry. It’s a little extra admin, but follow our guide and you’ll soon be on top of it.
- What is GST?
You’ve probably heard about GST – it stands for goods and services tax and is added onto prices in New Zealand.
- Registering for GST
Find out if your business needs to register for GST. If so, learn how to do it and find out what happens next.
- Calculating GST and issuing tax invoices
If you’re a GST-registered business you must add GST to your prices. You also need to issue GST invoices. Find out how.
- Claiming back GST
GST-registered businesses can claim back the GST they pay on business expenses. Let’s learn how.
- Working out your GST refund or payment
Working out GST is simple maths. Keeping track of all your transactions is the tricky part. Let’s learn the process.
- GST returns and due dates
As a GST-registered business you’ll declare how much you’ve collected and paid. You do this by filing GST returns.
- Tools and guides for your business
Now you know the ins and outs of GST, but it can be tough to keep on top of it all. Xero’s got the resources to help.
Download the guide to GST
Get your small business tax sorted. Fill in your details to get our full GST guide as a PDF.