A registered person will incur late payment penalty of 1% of their underpaid GST obligation on the first day after the due date, and a 4% incremental penalty on the seventh day after the due date. Therefore, once a person is registered for GST all of their business activities will be covered by the registration – even if the nature of some of those activities are different. You’re likely to be charged GST on most supplies you purchase for your taxable activity. GST is a tax added to the price of most goods and services, including imports.
Remote sellers may optionally register for GST on a standard basis if they will be making taxable supplies in New Zealand in addition to their remote sales. This means he can claim a refund when he files his monthly GST return with the IRD. This example demonstrates how a business that makes sales but does not receive payment in a given month can still account for GST paid on expenses incurred during that period.
Tax Returns for Working in New Zealand
Consequently, wholesalers often state prices exclusive of GST, but must collect the full, GST-inclusive price when they make the sale and account to the IRD for the GST so collected. The same applies if your taxable period ending falls on 31st July. Your GST return and payment due will be on the 28th of the following month, on 28th August.
- This is the 28th of the month after the end of your taxable period.
- All GST returns have to be submitted by the 28th day of the following month, together with any payment.
- Therefore, GST is not collected on imports below $1,000 where a remote seller falls below the threshold and does not voluntarily register.
In this example, Tim has paid $3,900 worth of GST on the necessary items to run his fishing operation in December. Since he did not receive any payments for his sales, his GST collected total for the month is $0. Well, the threshold amount refers to your total sales in the country, during any 12-month period. This can be a calculation of sales in the last twelve months, or a prediction of sales in the next twelve months — any rolling year-long period, past or future. Special rules apply for electronic marketplaces such as app stores that act as sales agents for underlying suppliers (eg independent app developers).
Taxes You (Might) Have to Pay as a Tourist in New Zealand
These penalties are very punitive, ranging from 20% to 150% of the GST discrepancy. A range of penalties can be imposed where businesses do not comply with the GST legislation. However, depending upon the types of supplies being made, the logistical considerations and the volume of transactions, non-residents may engage with a local agent to facilitate the supply. Specific GST provisions exist regarding transactions involving agents that should be considered before making any decisions. A person cannot be treated as a member of more than one GST group at a time. You may need to keep an eye on the ongoing use of the goods and services.
These are goods or services that the customer receives via email, by downloading them from the Internet, or through logging into a website. Time of supply arises at the earlier of an invoice being issued or payment being received. However, there are some disadvantages and any decision on whether to group register should be carefully considered. For example, all GST group members (including former members) are jointly and severally liable for the GST debt of the group during the period of their membership.
New Zealand’s GST for digital products
One important thing you must not forget is the payee code, which shows the type of tax the payment is for. This rule does not apply to you if your taxable period ends on 31st March and 30th November. If your taxable period ends on the 31st gross income definition March, then your due is on the 7th May, whereas the latter falls on 15th January. You will generally only account for GST on your sales in your GST returns. If you cannot submit your return, or pay on time penalties and interest may apply.
As a GST-registered business, you can claim back the GST you’re charged on goods and services you buy and use in your taxable activity. It is usually charged at a rate of 15% by GST-registered persons and is added to the price of most goods and services supplied in New Zealand, including most imported goods and services. There are two rates of GST that are applied to goods and services in New Zealand; standard rate and zero rate. The most common exempt supplies include financial services, residential rent, charitable donations, fines, penalties and interest. You can only claim GST on goods and services to the extent they’re used in your taxable activity to make taxable supplies.
You can rest assured as the software will do the work for your tax calculation. Instead of spending a tremendous amount of time on manual tasks, you can have more time for the things you love with Deskera. Otherwise you have to file GST103 Report, if you’re liable for provisional tax. During the GST registration process, you are required to fill in the business industry classification code (BIC). Exempt supplies are not subject to GST in New Zealand, meaning you do not need to include this in your GST return. Most businesses normally advertised the pricing of goods inclusive of GST in their physical stores or online stores unless stated otherwise.