No one wants to hear about the extra fees or taxes they might have to pay anywhere in the world. Unfortunately for tourists, there are quite a few taxes to juggle when visiting New Zealand. As many taxes are included in the price, you’ll hardly notice that you’re paying the extra percentage. Additionally, there are a couple of visitor taxes for New Zealand, such as the NZETA and IVL, for which you will have to pay an upfront cost.
- GST New Zealand can be filed at the inland revenue department either using a paper form, via an online portal, or accounting software.
- In other words, any entity i.e., business, trade, etc. that is registered under the government is liable to pay tax on any taxable activity with a turnover of $60,000 in the 12 months period.
- GST-registered businesses submit the GST to the Inland Revenue Department.
- Different countries have different names for this good and service tax like GST and VAT Value Added Tax and the percentage of the tax varies.
- If you’re unsure about whether your business needs to register, you can contact us or your tax agent.
This happens when the GST paid on eligible expenses is greater than the GST collected from sales. While it might feel like a good thing, you don’t really want this to happen too often; it’s an indicator that your business is going backwards. Now that you got basic information about GST, registered for a GST return if you haven’t and establish your business. And as differences between ebitda and operating cash flow a registered business always remember when is GST due, if possible, note GST dates in your calendar so you can file on time. Also, remember how frequently you should file GST returns, and keep a good record of sales and purchases. The process of GST New Zealand is fairly easy to understand and follow through so don’t hesitate and build your business in good practice and legal grounding.
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GST you paid on eligible business expenses is subtracted from the GST you collected on sales. For example, if you collected $500 GST on your sales for the period and you paid $100 GST on business-related purchases for the same period, the amount of you need to pay to the IRD will be $400. However, sometimes it’s not added and the price list mentions the price plus GST (+GST) to indicate an added charge of 15% will be added to the displayed price. GST-registered businesses submit the GST to the Inland Revenue Department. The GST periods differ depending on the size of the company and the amount of sales during a certain period.
How can GST affect my business?
You can read about when a non-resident is deemed to make a taxable supply in New Zealand in section 8(2) to (4) of the Goods and Services Tax Act 1985. Finally, for more essential advice for your trip, don’t forget to check out the 31 Tips for Travelling in New Zealand. Tipping is not mandatory or expected in New Zealand, but it will be appreciated if you tip to reward exceptional service.
Fill out the return details
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$100 and you will pay for it either when you request your NZETA or when you apply for your Visitor Visa. 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.
But if you plan ahead, don’t let things build up and get help when you need it, you should be fine. Keeping an eye on the numbers, rather than relying on gut feel, is the key to staying afloat and recognising real successes to celebrate along the way. Obviously you can play with pricing components to reach a GST inclusive price that suits your market. For example, if you want an item to cost $99.95, your ex-GST price is $86.91. There are online GST calculators to help with establishing price points. Check out our tips on the art of invoicing to help speed up payment.
We asked some of them for explanations and pointers, which we put into this guide. Xero does not provide accounting, tax, business or legal advice. This guide has been provided for information purposes only. You should consult your own professional advisors for advice directly relating to your business or before taking action in relation to any of the content provided. Because businesses claim back their input GST, the GST inclusive price is usually irrelevant for business purchasing decisions, other than in relation to cash flow issues. 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.
Only businesses with sales of more than $24 million have to file GST returns every month. If you earn over $500,000 per year, you can’t choose the six-monthly filing option. On 1 October 2016, the taxation of digital (‘remote’) services supplied by offshore companies (non-New Zealand) to consumers based in New Zealand changed. Goods and services tax (GST) is New Zealand’s consumption tax.