What Is GST in New Zealand?

GST stands for Goods and Services Tax. It is a consumption tax added to the price of most goods and services supplied in New Zealand.

The current standard GST rate is 15%. GST-registered businesses generally collect GST from customers and account for it to Inland Revenue. :contentReference[oaicite:4]{index=4}

Businesses can generally claim GST on eligible business purchases and expenses, subject to the GST rules that apply to the particular transaction.

For a GST-registered business, the GST return generally compares GST collected on taxable supplies with GST paid on eligible business purchases and other applicable adjustments.

GST Wellington: Who Needs to Register?

One of the most important GST questions for a Wellington business is whether registration is required.

You generally must register for GST if you carry out a taxable activity and either:

• Your turnover was at least $60,000 in the last 12 months; or
• You expect your turnover to be at least $60,000 in the next 12 months; or
• You carry out a taxable activity and add GST to the prices of your goods or services.

The $60,000 test is based on turnover from the taxable activity rather than simply whether you consider yourself to be a large or small business. :contentReference[oaicite:5]{index=5}

Businesses below the threshold can also choose to register voluntarily in certain circumstances.

How to Register for GST in Wellington

If you determine that GST registration is required, you can register with Inland Revenue.

Step 1: Check Your Turnover

Review your taxable activity and calculate your turnover for the relevant 12-month period.

Step 2: Determine Whether Registration Is Required

Check whether your turnover has reached or is expected to reach the GST registration threshold.

Step 3: Choose Your Accounting Basis

When registering, you need to select an accounting basis for GST. Inland Revenue provides different accounting basis options depending on the circumstances of the business.

Step 4: Choose Your Filing Frequency

You also choose how often you will file your GST returns. Available filing frequencies can depend on turnover and other requirements. :contentReference[oaicite:6]{index=6}

Step 5: Set Up Your Accounting System

Make sure your invoicing, bookkeeping and accounting systems are configured correctly before you start charging and accounting for GST.

What Is the GST Rate in New Zealand?

The standard GST rate in New Zealand is 15%. Most taxable supplies made by GST-registered businesses are subject to this rate unless a specific rule applies. :contentReference[oaicite:7]{index=7}

For example, if a business sells a taxable service for $100 excluding GST, the GST component would generally be $15 and the total price would be $115 including GST.

If a price already includes GST, the GST component can generally be calculated using the applicable GST fraction. Inland Revenue provides examples of GST-inclusive calculations. :contentReference[oaicite:8]{index=8}

What Types of GST Supplies Are There?

Not every transaction is treated in exactly the same way for GST purposes.

Standard-Rated Supplies

Most taxable supplies are subject to GST at 15%.

Zero-Rated Supplies

Certain supplies are taxable at a GST rate of 0%. These transactions can still have GST consequences and should be recorded correctly.

Exempt Supplies

Some supplies are exempt from GST. Different rules apply to exempt supplies, including their treatment when calculating GST.

Because the GST treatment can differ depending on the nature of the transaction, businesses should not automatically assume that every sale should have 15% GST added.

GST Returns Wellington: How GST Returns Work

A GST-registered business must generally file a GST return for every taxable period, including periods where the return is nil. :contentReference[oaicite:9]{index=9}

The return generally requires the business to calculate relevant sales and income, zero-rated supplies, purchases and expenses, and applicable debit and credit adjustments.

The calculation can depend on the accounting basis used by the business. :contentReference[oaicite:10]{index=10}

GST Collected vs GST Paid

If the GST collected on taxable supplies is greater than eligible GST paid on purchases and other applicable credits, the business may have GST to pay.

If eligible GST paid exceeds the GST collected, the business may be entitled to a GST refund.

GST Filing and Payment Dates

For most GST taxable periods, the GST return is due by the 28th of the month after the end of the taxable period. There are specific exceptions for taxable periods ending 31 March and 30 November. :contentReference[oaicite:11]{index=11}

GST payment is generally due on the same day as the GST return. :contentReference[oaicite:12]{index=12}

Late filing and payment can result in penalties, so businesses should keep a calendar of their GST obligations.

How Often Do You File GST?

GST-registered businesses can have different filing frequencies depending on their circumstances.

Inland Revenue currently provides monthly, two-monthly and six-monthly filing options subject to the applicable eligibility rules. :contentReference[oaicite:13]{index=13}

Inland Revenue states that two-monthly filing is available to businesses with sales under $24 million in any 12-month period, while six-monthly filing is available to businesses with sales under $500,000 in any 12-month period, subject to the applicable rules. :contentReference[oaicite:14]{index=14}

GST Accounting Basis: Payments, Invoice or Hybrid

When you register for GST, you choose an accounting basis. The basis affects when transactions are included in your GST calculations.

Payments Basis

Under the payments basis, GST is generally accounted for based on payments received and made, subject to the relevant GST rules.

Invoice Basis

Under the invoice basis, GST can generally be accounted for when invoices are issued or received, subject to the applicable rules.

Hybrid Basis

A hybrid basis combines elements of the payments and invoice approaches.

The right accounting basis depends on the business and its circumstances. Inland Revenue provides guidance and an online tool to help businesses consider their options. :contentReference[oaicite:15]{index=15}

GST Record Keeping in Wellington

Good GST records are essential. They help you calculate GST correctly, prepare returns and support the figures reported to Inland Revenue.

Inland Revenue states that businesses must keep records of cash and non-cash sales and expenses and generally retain tax records for at least 7 tax years. :contentReference[oaicite:16]{index=16}

Examples of useful business records include:

• Sales invoices
• Purchase invoices
• Receipts
• Bank statements
• Credit card records
• Accounting records
• Taxable supply information
• Supply correction information
• Cashbook records
• Point-of-sale records

Electronic records can be used, and businesses using cloud-based systems need to make sure their record-keeping arrangements comply with Inland Revenue requirements. :contentReference[oaicite:17]{index=17}

What GST Can a Business Claim?

A GST-registered business may generally be able to claim GST on eligible goods and services purchased for its taxable activity.

However, not every expense automatically creates a GST claim.

Businesses should check:

• Whether the purchase relates to the taxable activity.
• Whether the transaction contains GST.
• Whether the business has the required taxable supply information.
• Whether private or exempt use affects the claim.
• Whether a GST adjustment is required.

Inland Revenue notes that purchases and expenses must be accounted for according to the applicable accounting basis and GST rules. :contentReference[oaicite:18]{index=18}

7 Common GST Mistakes Wellington Businesses Make

1. Registering Too Late

Businesses may overlook the GST registration threshold as their turnover grows.

2. Charging GST Incorrectly

A business may incorrectly add GST to a transaction or fail to apply the correct GST treatment.

3. Missing GST Deadlines

Late filing and payment can create unnecessary compliance issues and potential penalties.

4. Claiming Private Expenses

Not every business expense is fully related to the taxable activity. Private or mixed-use expenses may require adjustments.

5. Poor Record Keeping

Missing invoices, receipts or transaction information can make it difficult to support GST calculations.

6. Forgetting GST Adjustments

Changes in business and private use or other circumstances can create GST adjustment requirements.

7. Treating GST as Business Profit

GST collected from customers generally needs to be accounted for to Inland Revenue. Businesses should factor upcoming GST payments into their cash-flow planning.

GST Adjustments: What Businesses Need to Know

GST adjustments can arise when the actual use of goods or services differs from the original treatment, including situations involving business, private or exempt use.

For example, an asset may initially be acquired for business use but later be used partly for private purposes. The GST treatment may then need to be reviewed.

Inland Revenue provides specific rules for GST adjustments and change-of-use situations. :contentReference[oaicite:19]{index=19}

Businesses should keep track of assets and transactions where GST adjustment rules may apply.

How Do GST Refunds Work?

A GST refund may arise when the amount of eligible GST paid exceeds the GST collected on taxable supplies for the relevant taxable period.

This can occur, for example, when a business has significant business purchases during a period.

However, receiving a GST refund does not automatically mean the business has made a profit or that every expense qualifies for a GST claim.

The underlying transactions and GST treatment still need to be correct.

GST and Business Cash Flow

GST can have a significant impact on business cash flow because businesses may collect GST from customers before the related GST payment becomes due.

A useful approach is to monitor GST throughout the taxable period rather than waiting until the return deadline.

Businesses can:

• Track GST collected from customers.
• Track eligible GST paid on purchases.
• Maintain accurate bookkeeping.
• Set aside funds for expected GST payments.
• Review upcoming GST obligations before making large business purchases.
• Reconcile accounting records regularly.

Good cash-flow planning can reduce the risk of being surprised by a large GST payment.

GST Wellington: Support for Local Businesses

Wellington has businesses across professional services, construction, hospitality, retail, property, technology, consulting and many other sectors.

GST obligations can vary depending on the nature of the business and the transactions it makes.

A Wellington business may need help with GST registration, return preparation, bookkeeping, GST adjustments, tax records or resolving an issue with Inland Revenue.

Getting the GST process right can help businesses maintain better records and understand their tax position throughout the year.

Can an Accountant Help With GST in Wellington?

Yes. An accountant or tax professional can help businesses understand and manage their GST obligations.

GST support may include:

• GST registration
• GST accounting basis selection
• GST filing frequency guidance
• GST return preparation
• GST calculations
• GST reconciliation
• GST adjustments
• GST record keeping
• GST refund questions
• Inland Revenue correspondence
• GST compliance reviews
• Business cash-flow planning

Professional support can be particularly useful if your business has complex transactions, multiple revenue streams, mixed-use assets or significant GST liabilities.

GST Wellington: Business Compliance Checklist

GST Wellington: Key Takeaways

• GST is currently charged at a standard rate of 15% in New Zealand.
• Businesses generally need to register when taxable activity turnover reaches or is expected to reach $60,000 in the relevant 12-month period.
• GST-registered businesses generally need to charge GST where applicable, file returns and pay GST owed.
• GST returns are generally due on the 28th of the month following the taxable period, subject to specific exceptions.
• Businesses can have different GST filing frequencies depending on their circumstances.
• The accounting basis selected can affect when GST transactions are accounted for.
• Businesses should keep accurate GST and tax records for at least 7 tax years.
• GST adjustments may be required for certain business, private and exempt-use situations.
• Good GST cash-flow planning can help businesses prepare for upcoming GST payments.
• Professional GST support can help businesses manage registration, returns, calculations and compliance.