What is GST?
You’ve probably heard about GST before – it stands for goods and services tax and is added to the price of most products and services in New Zealand. As it’s almost always included in the price on the shelf you probably don’t give it a second thought.
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.
Chapter 2: Registering for GST
Ready to register for GST? We’ll take you through each step, from what you need before you register to choosing your filing frequency and accounting basis.Read next chapter
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Your quick guide to GST in New Zealand (1.3MB PDF)View the ebook