New Zealand GST
Goods and Services Tax (GST) is New Zealand’s consumption tax (similar to our Australian GST). It is a 15% tax added to the price of most goods and services supplied in New Zealand, including most imported goods and services.
You are required to register for GST in New Zealand if your taxable supplies are more than NZD $60,000 in a 12 month period. You can still register for GST even if your taxable supplies are less then NZD $60,000 providing you meet certain criteria.
However, if it is your intention to register as an Australian company, you should first read an article we wrote about the double taxation that will almost certainly occur.
There is no charge for a quick chat so give us a call on 1300 791 600 so we can help you register and claim for New Zealand GST.
Before registering for New Zealand GST, it’s important to determine that you actually qualify for GST registration.
To Register For New Zealand GST You Must Meet Certain Criteria.
Continuous and Regular Activity
Your business must be carried on “continuously” and “regularly”. If it is a short-term venture, or your sales are patchy or spasmodic, Inland Revenue might consider that you do not meet this criteria even if the intention was, when you registered, that you would be carrying on a prosperous activity.
Therefore, if you are registered for New Zealand GST and you are claiming a number of refunds as a result of your costs exceeding your sales on a regular basis, you ought to check with us to ensure you still meet the criteria. If Inland Revenue start reviewing matters before you do something about it, the penalties may be significant.
Business Must Be Carried Out In NZ
To be validly registered for New Zealand GST, your business must be carrying on a taxable activity in New Zealand.
If your business is being run from Australia and you are simply sending goods to a New Zealand customer, it can be argued that the business is actually being carried out in Australia rather than New Zealand.
If it makes good business sense to register for New Zealand GST, you should really discuss your business model with us.
Supplying Remote (Online or Digital) Services Into New Zealand
If you are supplying online services to the New Zealand market, there are times when you will need to register for GST.
New Zealand has introduced a special GST requirement known as the “Netflix” tax. It will particularly apply to your business if you sell digital online product to New Zealand resident customers who are not, in themselves, registered for New Zealand GST.
Therefore, if you sell your product exclusively to New Zealand businesses you are probably in the clear. But if you sell to domestic consumers in New Zealand and your sales to the New Zealand market exceeds NZD$60,000 in a 12 month period, you should contact us for advice on 1300 791 600.
We have written a detailed article on our blog which you can click here to read.
Advice For Australian Businesses Registering For GST In New Zealand
In order to register for New Zealand GST, you will need a New Zealand tax file number (called an IRD number). As a non-resident, you are subject to New Zealand’s Anti-Money Laundering and Counterterrorism Financing legislation. Therefore, before you will be allocated an IRD number, you will need a New Zealand bank account. And New Zealand banks are being very hesitant in opening up a bank account for non-residents because of the background checking they are required to do under that legislation.
Therefore, they will most probably suggest that, in order to get a New Zealand bank account, you incorporate a New Zealand company. That brings us back to that article we wrote on double taxation!
And that is exactly why you should be contacting us in the first instance. We can usually protect you from double taxation and register you for all relevant tax types including New Zealand GST.
There is no charge for a quick chat so give us a call on 1300 791 600 and we can talk you through the issues.
Claiming New Zealand GST Refunds As A Non-Resident Business
We get a lot of enquiries from Australian businesses looking to claim a GST refund as a result of shipping product through New Zealand which has been subject to GST charged by New Zealand Customs.
These businesses approach us on the view that they are entitled to a GST refund as a non-resident under the special Non-Resident category.
In short, that GST refund category will not be available to you and registering and making a claim may leave you exposed to penalties down the track.
The ability to claim a GST refund from New Zealand under this category only relates to companies who are not doing business in New Zealand. If you are moving product through New Zealand you are automatically excluded from this category.
The category was introduced to encourage overseas businesses who have no connection with New Zealand, to consider New Zealand as an attractive destination to hold a conference or something similar. So that the GST content was not a deterrent as a cost factor, the New Zealand government decided to allow a refund in these circumstances.
In other words, if you do not do business in New Zealand but decide to have a conference in Queenstown, you will generally be entitled to a refund on GST paid in New Zealand for that conference.
To make a claim for GST under this category you must be paying GST as a result of receiving goods or services in New Zealand. They cannot be your own goods and services that you are receiving.
It is not designed to be a way of allowing overseas companies to undercut New Zealand businesses by being able to sell products to New Zealand customers at a cheaper price than New Zealand businesses can!
If you are selling product to a New Zealand customer, that product will usually be subject to New Zealand GST.
OK, It’s Time To Register For GST – What’s Next?
New Zealand does not have the equivalent of a quarterly BAS statement. In fact, all New Zealand taxes are treated separately with each having its own return filing date and tax payment date. It’s one of the reasons we suggest that any Australian business grappling with New Zealand tax should download our free NZTAX APP so you can receive a reminder when your returns are due. You can find our nztax app by clicking here.
For GST purposes, you have an option of filing your GST returns monthly, 2-monthly or 6-monthly.
We suggest you would only choose a monthly period if you were expecting regular GST refunds for example as the result of exporting product from New Zealand.
The 6-monthly period is only available if your annual turnover is less than, or likely to be less than, NZD$500,000 per annum. The benefit, of course, is that you only have to file two returns each year. The downside being that you will have to come up with 6 months worth of GST in one hit!
New Zealand GST Returns – $200 +GST
If you are already registered for New Zealand GST and need to prepare and lodge a GST return, we can certainly help.
For many Australian-controlled businesses, having a New Zealand-registered tax agent to prepare and lodge the GST returns will ensure that you don’t fall for the many differences that apply to the different regimes.
Our standard fee to prepare and lodge a New Zealand GST return is just $200 +GST per return.
And, if you prefer, you can pay the New Zealand equivalent. We accept both Australian and New Zealand currency and can model our operation so that you can receive your invoice with either New Zealand or Australian GST.
If you are expecting a large New Zealand GST refund, we can often speed up the refund process by ensuring your GST return is correct and by including additional information which we know, from our frequent contact with Inland Revenue, is the type of information they require as part of their review process.
New Zealand GST Audits And Reviews
If you have been selected for a New Zealand GST Audit, investigation or review we can advise and represent you with Inland Revenue. If things have been done correctly, we can often expedite the payment of a GST refund.
Even where things have gone wrong, we may be able to negotiate reductions in shortfall penalties. You should note that New Zealand has one of the most aggressive tax penalty regimes in the world so seeking professional advice when first notified of any kind of GST review is in your best interests.
New Zealand GST Reassessments
If you have been subject to a New Zealand GST investigation, and your GST returns have been formally reassessed by Inland Revenue, you will not only be subject to shortfall penalties (for getting things wrong) but Inland Revenue will also charge interest on the outstanding amounts.
If the GST period occurred some time ago, that interest can be significant. Inland Revenue has very little scope for reducing the interest component and therefore cannot usually entertain any applications for remission of interest charges on reassessed GST. Interest can be charged in excess of 9% per annum.
We have available a facility that can reduce the interest cost by more than 30%. We can also have late payment penalties reversed. If you have been subject to a New Zealand GST investigation and have been charged Use of Money Interest on the reassessed GST, you should contact us urgently.
If we are to provide you with relief on the interest we need to have a facility in place within 75 days of the date of the reassessment. We can also give you flexibility on the payment terms for paying back the outstanding GST.
We can cover reassessed GST amounts between NZ$4,000 and NZ$10 million.
We can confirm cover within a couple of days, no documentation or financial reports are required. The arrangement can be finalised by email.
This is an IRD-approved facility.
Questions about New Zealand GST?
Our New Zealand expert, Mike Reddy, is a New Zealand accountant and NZ-registered tax agent based in Sydney. He works with small businesses throughout Australia to help take care of your New Zealand tax questions and Returns from our Sydney-based office.
Having been preparing and filing New Zealand tax returns since 1994, Mike is the most experienced New Zealand tax agent in Australia. He is regularly engaged by Australian tax agents and accountants who have clients with New Zealand interests.
So when it comes to looking after your New Zealand affairs, Mike can definitely help you with the right advice.
Call us now on 1300 791 600. There is no charge for a quick chat so we can talk you through the issues.