How to Register for GST in New Zealand

In New Zealand, the Goods and Services Tax (GST) operates as a consumption tax applied to most goods and services. Currently set at a rate of 15%, this tax is typically included in the advertised price of products and services. Businesses registered for GST collect this tax on behalf of the government and can also claim back GST paid on their business expenses.

Understanding When to Register

Businesses in New Zealand must register for GST if their taxable supplies have exceeded or are likely to exceed NZD $60,000 in any 12-month period. This threshold applies to income generated from a “taxable activity,” which refers to any continuous or regular activity involving the supply of goods and services for consideration. For example, if a business sells products or provides services, the revenue from these activities contributes to this threshold.

Businesses that do not meet the mandatory NZD $60,000 threshold can still choose to register for GST voluntarily. Voluntary registration allows businesses to claim GST back on their expenses, which can be beneficial during startup phases with significant purchases but limited income. Once registered, whether mandatorily or voluntarily, a business must charge GST on its sales and file regular GST returns.

During registration, a choice must be made regarding the accounting basis for GST: the payments basis or the invoice basis. The payments basis accounts for GST when money is actually received or paid, aligning well with cash flow, and is available for businesses with turnover under NZD $2 million. The invoice basis accounts for GST when an invoice is issued or received, regardless of whether payment has been made, and is typically required for larger businesses or those exceeding the NZD $2 million turnover threshold.

Gathering Your Registration Details

Compiling all necessary information and documentation before starting the GST registration process helps ensure accuracy and streamlines the application. Key personal details required include your Inland Revenue Department (IRD) number and full contact information.

For the business itself, you will need its legal name, any trading names, the specific type of business structure (e.g., sole trader, company, partnership), and its Business Industry Classification (BIC) code. The physical and postal addresses for the business are also necessary. Additionally, you will need to provide details about your business’s turnover for the past 12 months and an estimate for the next 12 months.

Providing bank account details is also a requirement, as this is where any GST refunds will be paid. Non-resident businesses may need to provide additional supporting documents, such as proof of consumption tax registration in their home country.

Submitting Your GST Registration

After gathering all the necessary information, the primary method for submitting your GST registration in New Zealand is through the Inland Revenue Department’s (IRD) online service, myIR. This online platform is the most common and efficient way to complete the process. You will need to log into your myIR account, creating one if you don’t already have one.

Once logged into myIR, select the option to register for Goods and Services Tax (GST). The system will then prompt you to input your prepared business and personal information into the relevant fields, including your IRD number, business details, and chosen accounting basis and filing frequency.

Review the entered information for accuracy before confirming and submitting the application. While online submission through myIR is the preferred method, alternative options like postal applications using specific forms may exist, though the online process is generally processed more quickly.

After Your Registration is Processed

Once your GST registration application has been submitted, the Inland Revenue Department (IRD) will process it and notify you of the outcome. This notification includes a confirmation of your GST registration and your unique GST number, which is usually the same as your IRD number for sole traders. You will also receive information regarding your official GST start date.

Upon successful registration, your GST filing frequency will be assigned, determining how often you must file GST returns. Frequencies include monthly, two-monthly, or six-monthly, with the specific period depending on your business’s turnover. For example, businesses with a turnover under NZD $500,000 may be eligible for six-monthly filing.

Note the first GST return period and its corresponding due date. GST returns and payments are due by the 28th of the month following the end of your taxable period, though there are exceptions for March and November periods. Understanding these due dates is important to avoid penalties. From the effective date of registration, maintaining accurate and comprehensive records of all sales and purchases is crucial for proper GST compliance.