How to File a GST Return in New Zealand

New Zealand’s Goods and Services Tax (GST) is a consumption tax applied to most goods and services. Businesses engaged in taxable activities must register for GST and file regular returns with the Inland Revenue Department (IRD). This ensures the 15% tax is collected.

Preparing Your GST Return

Businesses must register for GST if annual turnover exceeds NZD 60,000, or if they anticipate exceeding this amount within 12 months. Those below this threshold can register voluntarily to claim back GST paid on expenses. Once registered, a business charges GST on sales.

GST filing frequency depends on annual turnover. Businesses with sales exceeding NZD 24 million file monthly. Those with sales between NZD 500,000 and NZD 24 million file every two months. Businesses with sales under NZD 500,000 can opt to file every six months.

Selecting an accounting basis determines when GST is accounted for. The payments basis, or cash basis, accounts for GST only when money is received or paid. This method suits smaller businesses with turnover under NZD 2 million, aligning GST payments with cash flow.

Conversely, the invoice basis (accrual basis) requires accounting for GST when an invoice is issued or received, regardless of payment. This method is more complex and becomes mandatory for businesses with annual turnover exceeding NZD 2 million. A hybrid method is also available.

To complete a GST return, businesses compile total sales and income, including GST collected from customers. They also record total spending, purchases, and expenses, noting GST paid. Exports are zero-rated, and imports may incur GST at the border.

Organizing transactions effectively is important for accurate calculation. Net GST payable or refundable is determined by subtracting total GST paid on eligible business expenses (input GST) from total GST collected on sales (output GST). Accurate record-keeping is essential for correct GST return preparation.

Methods for Filing Your GST Return

Once information is gathered, businesses can file their GST return. The main method is through myIR, the IRD’s online portal. This digital platform offers instant confirmation and faster processing.

To file using myIR, a business logs into their account and navigates to the GST section. From there, they select the specific taxable period for which they are filing the return. The prepared figures for total sales, GST collected, total purchases, and GST paid are then entered into the designated fields.

After entering data, the system provides a summary for review, displaying the net GST payable or refundable. Check all figures for accuracy before submission. The myIR system also allows for attaching supporting correspondence or receipts if needed.

Businesses can engage a tax agent to file the GST return on their behalf. This is beneficial for businesses seeking professional assistance with tax obligations. Tax agents have direct access to specialized filing systems, streamlining the submission process.

Filing a paper return remains an option. GST101A forms can be obtained from the IRD. When filling out these forms, ensure all fields are completed with the prepared figures.

Paying GST and Record Keeping

After a GST return is filed, any GST owed to the IRD must be paid by the due date. GST returns and payments are generally due on the 28th of the month following the taxable period. Exceptions include November 30 (due January 15) and March 31 (due May 7). If a due date falls on a weekend or public holiday, the deadline extends to the next working day.

Several methods are available for GST payments. Businesses can pay through online banking, myIR using a credit/debit card, or direct debit. These digital options ensure timely remittance and transaction confirmation.

Maintaining accurate records is an ongoing requirement for GST-registered businesses. All records supporting GST returns (sales invoices, purchase receipts, credit notes, bank statements) must be kept for a minimum of seven years. This retention period is important for compliance, as records may be required during an IRD audit.

Recent legislative changes, effective April 1, 2023, replaced “tax invoices” with a broader need to retain “taxable supply information.” This change offers flexibility in record-keeping, though traditional tax invoices still fulfill new requirements. Businesses can store records electronically, provided they are accessible and convertible to paper format if necessary.