Understanding GST in New Zealand
The Goods and Services Tax (GST) is New Zealand's consumption tax, applied to most goods and services sold or consumed in the country. At 15%, New Zealand has one of the most comprehensive and simple GST systems globally.
Key Facts About NZ GST
| GST Rate | 15% |
| Introduced | October 1, 1986 (at 10%) |
| Current Rate Since | October 1, 2010 |
| Registration Threshold | $60,000 annual turnover |
| Reporting | Monthly, 2-monthly, or 6-monthly |
| Administered By | Inland Revenue (IRD) |
How NZ GST Works
New Zealand's GST system is renowned for its simplicity and broad base:
- Businesses charge GST: Add 15% to the price of most goods and services
- Claim input tax: Recover GST paid on business purchases
- File returns: Pay the net GST to IRD regularly
Example:
You sell services for $100 + $15 GST = $115 total
You paid $60 + $9 GST on expenses
You owe IRD: $15 - $9 = $6 GST
What's Subject to GST?
Taxable at 15%:
- Most goods and services
- Imported goods and services
- Digital products and streaming services
- Food and beverages (including restaurant meals)
- Professional services
- Retail sales
Zero-Rated (0% GST):
- Exports of goods and services
- Fine metals (gold, silver over 99.5% purity)
- Financial services to non-residents
Exempt (No GST):
Unlike many countries, New Zealand has very few GST exemptions. Most items that would be exempt elsewhere (like basic foods) are taxable in NZ.
The main exemptions are:
- Donated goods sold by non-profit organizations
- Financial services provided to NZ residents
- Residential rental accommodation
GST Registration Requirements
You must register for GST if:
- Your taxable supplies and income in the last 12 months are more than $60,000
- You expect your taxable supplies and income in the next 12 months will be more than $60,000
You can voluntarily register if your turnover is below $60,000. This might be beneficial if:
- You want to claim GST on business expenses
- Your customers are GST-registered businesses
- You want to appear more professional
GST Rate History
| Period | Rate |
|---|---|
| October 1, 1986 - July 31, 1989 | 10% |
| August 1, 1989 - June 30, 2010 | 12.5% |
| October 1, 2010 - Present | 15% |
NZ GST vs Other Countries
New Zealand's 15% GST is notable for being applied broadly with minimal exemptions. This makes compliance simpler compared to countries like Australia (10%, many exemptions) or European nations (20%+, complex rules).
Filing and Payment
GST returns are filed with the Inland Revenue Department (IRD) based on your turnover:
- Monthly: Turnover over $24 million
- Two-monthly: Turnover $500,000 - $24 million (most common)
- Six-monthly: Turnover under $500,000