What You Need to Know About GST If You're Providing Services to People Outside NZ

Registering for GST

You must register for GST if you carry out a taxable activity, and your turnover (gross income, including zero-rated supplies) for the last 12 months was $60,000 or more, or if GST is included in your prices.

You may register for GST voluntarily if you carry out a taxable activity and your annual turnover is under $60,000, but bear in mind you’ll be subject to the same requirements as everyone else who’s GST registered.

Most activities carried on continuously or regularly that supply (or intend to supply) goods and services to others for payment, are taxable activities.

You can choose your filing frequency (monthly, two-monthly, or six-monthly) and accounting basis (invoice, payments, or hybrid) based on the total taxable supplies you have made.

Once you’re GST registered

Once you’re registered for GST you must (for all the taxable supplies you make):

• charge 15% GST on all your sales, except for zero-rated supplies where GST is charged at 0%
• issue tax invoices within 28 days
• keep tax invoices in NZ currency
• keep tax invoices and receipts when you buy goods or services related to the taxable supplies you make
• file regular GST returns even if you have no income or expenses
• keep other records and paperwork to support the figures in your GST returns.

Filing online through myIR (Inland Revenue’s secure online service) or your accounting software makes it easier for you to meet your GST obligations.

What are zero-rated supplies?

Certain taxable supplies are taxed at the rate of 0% rather than at the standard rate of 15%. You must include all zero-rated supplies in Box 5 on your GST return along with your total taxable supplies. You will also need to show these zero-rated supplies in Box 6 on your return.

The following exported services are zero-rated:

• Services supplied to non-residents who are outside New Zealand at the time the service is performed.

Example: Production services provided by a NZ resident production contractor to a nonresident company that has no more than a minor presence in NZ.

If you have zero-rated supplies you can claim GST on your expenses related to the taxable supplies you make. You include all goods and services acquired that include GST and are not exempt supplies in Box 11 of your return.

Cancelling your GST registration

If you stop your taxable activity and you don’t intend to start a new taxable activity within the next 12 months you must cancel your GST registration within 21 days.

If your turnover for the next 12 months will be under $60,000, or if you’ve been filing nil returns for some time, consider cancelling your GST registration.

You can’t cancel your GST registration even if your turnover drops under $60,000 if your prices include GST.

Upon cancellation, your final GST return must include all taxable goods and services up to the cancellation date. If you’re keeping assets, either for private use or for use in another business, you’ll need to make an adjustment in your final GST return for the GST on the open market value of the assets.

Check out www.ird.govt.nz/gst/ for more information and to use our services and tools.