Key takeaways
- New Zealand GST rate: The standard GST rate is 15%, with a 9% reduced rate for long-term accommodation and a 0% rate for exports and international services.
- Registration threshold: Businesses earning over NZ$60,000 annually must register for GST through the Inland Revenue Department (IRD) online portal.
- Filing & compliance: GST returns are filed monthly, bi-monthly, or six-monthly, depending on turnover, with penalties and interest for late submissions or payments.
Expanding your business to New Zealand requires an understanding of its VAT system, known locally as Goods and Services Tax (GST). This guide delves into the nuances of the New Zealand GST framework, providing you with the knowledge needed to successfully navigate this aspect of doing business in New Zealand.
What is the New Zealand GST rate?
New Zealand's GST system is straightforward, with a standard New Zealand GST rate of 15% for almost all goods and services, a reduced rate of 9%, and a 0% GST rate.
Registering for GST in New Zealand
In New Zealand, the GST registration threshold for both resident and non-resident businesses is NZ$60,000 in annual turnover. If your company’s taxable turnover exceeds this amount, you must register for New Zealand GST. Businesses with turnover below this threshold can opt for voluntary registration, enabling them to recover any input GST they may be due.
To register for New Zealand GST, businesses can apply online through the Inland Revenue Department (IRD) website. The process is relatively straightforward, and businesses will receive a New Zealand GST number upon successful registration. GST registration normally takes no more than 10 days to complete.
Fiscal representative in New Zealand
Non-resident businesses are not required to appoint a local fiscal representative for GST purposes in New Zealand. However, they must ensure compliance with all GST regulations.
New Zealand GST return filing and penalties
The filing frequency for New Zealand GST returns depends on a business’s annual turnover:
- Monthly filing for business with a turnover above NZ$24 million.
- Bi-monthly filing for businesses with a turnover between NZ$500,000 and NZ$24 million.
- Six-monthly filing for businesses with a turnover below NZ$500,000.
Returns and payments are due to the IRD by the 28th of the month following the end of the return period.
Late filing or payments can result in penalties and interest charges. The IRD imposes a 1% monthly penalty on unpaid amounts and interest charges on outstanding balances. Missing a New Zealand GST return deadline will result in a fine of NZ$250.
Reverse charge in New Zealand
The reverse charge mechanism is applicable in New Zealand for imported services and certain other situations. This mechanism requires the recipient of the service to account for New Zealand GST, rather than the supplier.
Frequently asked questions
What is the current GST rate in New Zealand?
The standard GST rate is 15%, applied to most goods and services. A 9% reduced rate applies to long-term hotel accommodation (over four weeks), and a 0% rate applies to exports, financial services, international transport, and certain land transactions.
When do I need to register for GST in New Zealand?
You must register if your annual taxable turnover exceeds NZ $60,000. Businesses below this threshold can register voluntarily to reclaim input GST on expenses.
How do I register for GST in New Zealand?
Registration is done online through the Inland Revenue Department (IRD) website. Once approved, you’ll receive your GST number—typically within 10 days.
Do foreign businesses need a fiscal representative in New Zealand?
No. Non-resident businesses are not required to appoint a fiscal representative but must still comply with New Zealand’s GST obligations.
How often must GST returns be filed in New Zealand?
Filing frequency depends on turnover:
- Monthly – above NZ $24 million
- Bi-monthly – NZ $500,000 – 24 million
- Six-monthly – below NZ $500,000
Returns and payments are due by the 28th of the month following each period.
