Registering for GST
Now that you’ve got a handle on the basics, find out if your business needs to register for GST and, if so, how to do it and what happens next.
Who needs to register for GST?
Businesses with a turnover of $60,000 or more are required to register. You may be an exception if you sell GST-exempt goods and services. You can get into legal difficulty if you don’t register for (and collect) GST when you should.
Benefits of registering
If you’re GST registered, you don’t end up paying GST on business expenses. You’ll still get charged the GST-inclusive price when you make the purchase, but you can claim that money back when you file your return with the IRD.
What do I need to register?
To register, you’ll need:
an IRD number (and a myIR online account)
a business industry classification code (which you can get here)
your business bank account details
Before you register for GST
During the registration process, you’ll be asked how often you plan to file a GST return, and how you account for GST.
Choosing your filing frequency
There are three options, but they may not all be available to you.
Businesses with more than $24 million in yearly turnover must file monthly.
Most small businesses are expected to file every couple of months.
You can drop to twice-a-year returns if your annual turnover is less than $500,000.
Choosing and changing your filing frequency
The IRD will put you on two-monthly filing unless you choose otherwise. You can also change your filing frequency at any time (assuming you qualify for more than one).
Choosing your accounting basis
Your accounting basis determines when you owe GST on sales (and when you can claim it on expenses). There are three options, but they may not all be available to you.
- Payments basis
You owe GST on a sale when you receive payment from a customer.
- Invoice basis
You owe GST on a sale when you raise an invoice or when you get paid, whichever comes first.
- Hybrid basis
You follow the invoice basis when working out what GST you owe, and the payments basis when working out what you can claim back. It can get complicated so only a few businesses use the hybrid basis.
Registering for GST online
It’s simple to register for GST yourself and it costs nothing. Just head over to the IRD website.
Once you’re registered for GST
Once you’ve registered for GST you’ll need to:
add GST to your prices
issue tax invoices to your customers
keep receipts and invoices to claim back GST on business expenses
file GST returns with the IRD
pay any GST due
Chapter 3: Calculating GST and issuing tax invoices
Working out the amount of GST to add to your goods or services is easier than you think. We’ll show you how to calculate GST and how to add GST to tax invoices.Read next chapter