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New Zealand: Update on bill including GST measures KPMG United States

Please note the comments above are for ordinary transactions subject to GST. Different rules may apply to imported goods or services, or acquisitions from non-GST registered person. There could be other practical implications as a result of the new GST invoicing rules being implemented.

  1. No one wants to hear about the extra fees or taxes they might have to pay anywhere in the world.
  2. This is pretty rare but still happens in some trade, wholesale retailers and services, so keep an eye out.
  3. If you choose to only collect GST on low-value goods, then the information must be itemized so the customs officials know to collect GST on high-value goods at the border.
  4. Importantly, if your business’ total sales exceed the $2 million threshold, you may still be able to use the payment basis.

Established in 1986, the Goods and Services Tax (GST) is a tax on almost anything you purchase in New Zealand. It is an inherent part of your trip here, whether you notice it or not. But before you do so, you need to make sure that you have calculated everything correctly. For example, if you are in the start-up or growth phase and you have large expenses but not as much income, you can get a GST refund when you file your return.

New Zealand Goods and Services tax history

“So to put it bluntly, we are going to let councils have more discretion over where they have density, but they’re going to have more housing. In some cases that will mean more greenfields development, where the infrastructure costs can justify it. Those that zoned for 30 years of housing growth would be able to opt out of the sometimes controversial MDRS. He said the lost productivity from expensive housing and dysfunctional cities would eventually cost New Zealanders in lost incomes and poorer public services. New Zealand also has agreements with some foreign tax authorities allowing them to collect unpaid GST on New Zealand’s behalf. Inland Revenue and Customs will also share information and work together to help identify instances of non-compliance.

This means that goods and services are subject to GST when they are consumed in New Zealand. In principle, GST should therefore be applied to all goods consumed in New Zealand, including imported goods, regardless of value. The IVL applies to all visitors with a passport from either a visa-waiver country or a country where you have to apply for a visitor visa to visit New Zealand. The IVL costs NZ$35 and you will pay this either when you request your NZETA or when you apply for your Visitor Visa.

Select ‘Goods and services tax (GST)’

The table below compares the required content of a tax invoice to the information required for TSI. Even if you are not required to make any changes, you should still be aware of these additional options as your suppliers’ invoicing practices may be changing, which could impact the way you operate your business. The existing rules bring in annual GST in excess of https://intuit-payroll.org/ NZ$300 million ($184 million). Officials estimate that the New Zealand gig economy is close to NZ$2 billion (regulatory impact statement, finalized May 25, 2022) so the new measure is likely to add significant new GST revenue. If you’ve bought goods from overseas, the supplier probably will not charge you GST unless they carry on a taxable activity in New Zealand.

[5] Certain supplies are levied at a rate of zero percent (see sections 11 and 11A of the Goods and Services Tax Act 1985). Travellers departing on airlines or private craft are charged a Customs levy of NZ$4.52. Travellers arriving on airlines or private craft are charged a Customs levy of NZ$16.59 and a biosecurity levy of NZ$16.92. The IVL is said to be “a way for travellers to contribute directly to the tourism infrastructure they use and to help protect and enhance the natural environment”. It is crucial to keep accurate records of your receipts and invoices. Even though your business has to pay GST, in practice, it is the final consumer who bears this tax.

You pay a 15% goods and services tax (GST) on most of your purchases in New Zealand. “In the coming months we will be looking at the best mechanism to give effect to our Build for Growth policy, where councils gain a financial windfall from new housing. Act campaigned strongly on sharing a percentage of the GST of new housing with councils. That will be part of the mix as we ponder how to get the incentives right,” Bishop said. When determining if you meet the threshold, do not include supplies sold to New Zealand businesses or goods that are each valued over 1,000 NZD. A) No change if your tax invoice shows the GST exclusive amount, GST amount and the gross amount for the supply.

2.11 Despite these benefits, when GST does not apply evenly, it may bias consumer and business decisions, which could lead to unfair and inefficient outcomes. If your business exceeds the 60,000 NZD threshold, then you will be required to register for, collect, and remit GST directly to New Zealand on all 10 tax tips for filing an amended return low-value goods. Duty and GST on high-value goods will be collected at the border or, for simplicity and if you meet certain requirements, you may elect to collect and remit GST on all goods (low and high value). This may seem a little confusing, so keep reading and we’ll explain this in more detail.

How to register for GST

We also go over whether it is necessary to tip in New Zealand, as well as advice for international travellers paying taxes for working in New Zealand. Providing services to New Zealand businesses generally does not require a GST registration. Even though you do not collect any tax on the sale of zero-rated supplies, you still need to report these in your return. Your taxable period (also known as filing frequency) refers to how often you need to file your GST returns with IRD. GST is a tax added to the price of most goods and services, including imports. This would be a huge gift to councils, but one that would cost central government, itself struggling with an enormous deficit, dearly.

The amount of GST you claim (input tax) is subtracted from the amount of GST you charge (output tax) to calculate your tax to pay or GST refund. 2.22 The legislation also required an inquiry by the Australian Productivity Commission on the effectiveness of the rules and other possible models for collecting GST on low-value imported goods. The Australian Productivity Commission completed its inquiry on 31 October 2017 and concluded that the legislated model was the most feasible option at the present time.

Can You Opt to Register?

You must keep taxable supply information for any supplies you receive. [6] The key exemptions are supplies of residential accommodation and business-to-consumer supplies of financial services. 2.18 While it is difficult to estimate the total revenue foregone resulting from the non-collection of GST on low-value imported goods with certainty, it is clear that the numbers are significant and a growing concern for Government. If you have worked in New Zealand as part of a working holiday visa, student visa, work visa or for whatever reason, you are entitled to a tax return (tax refund) on some of the taxes that were deducted from your wages. There are two “tourist taxes” that visitors are expected to pay, one is mandatory for all visitors while the other depends on what type of visa you are on. No, as a visitor, you cannot claim GST back once you have paid for it.

That includes food, medication, equipment, going to the hairdressers, the doctors and even the activities you are likely to do as a traveller in New Zealand. Some rare services are exempt from GST and duty-free will offer items tax-free when landing in New Zealand from an international flight. These are the taxes you might be expected to pay as a tourist or international visitor to New Zealand, which we will go into more detail about in this New Zealand tax guide for travellers. Importantly, if your business’ total sales exceed the $2 million threshold, you may still be able to use the payment basis. If you are not sure whether your business will meet the turnover threshold, but you estimate it might, you can voluntarily register for GST.

If you run a business in New Zealand, you may need to collect Goods and Services Tax (GST) from your customers. This is the case regardless of whether you operate your business as a sole trader, contractor, partnership or company. This is usually 15%, however, it may be “zero-rated” at 0% in certain circumstances. When a package is entering New Zealand, customs officials will need to clearly understand which items GST has already been collected on. These details can be communicated in the comments section of the commercial invoice and/or by supplying a copy of the customer receipt with details that GST has already been collected.

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