New Zealand – indirect tax guide
New Zealand – indirect tax guide
Explore the requirements and rules that apply to indirect taxes in New Zealand.
General
GST.
Standard rate:
15 percent.
What supplies are liable to the standard rate?
Supplies of goods and services made in New Zealand by a registered person in the course or furtherance of a taxable activity, other than exempt supplies.
Are there any reduced rates, zero- rates or exemptions and if so, what do they apply to?
Zero-rated supplies include exports; supplies of going concerns; certain supplies of fine metal; supplies of financial services to GST registered persons making predominantly (75 percent) taxable supplies; and supplies of land where both the vendor and the purchaser are registered for GST.
Exempt supplies include financial services that are not zero-rated, residential rent, supplies of fine metals that are not zero-rated and supplies of donated goods by non-profit bodies.
A reduced rate of 9 percent applies to the provision of accommodation in hotels, motels and similar for longer than 4 weeks.
VAT/GST registration
Who is required to register and what is the threshold?
Any person that is carrying on a taxable activity and whose current or projected annual turnover in New Zealand is 60,000 New Zealand dollars (NZD) or more.
Non-resident suppliers of low-value goods (below NZD1,000) or remote services of more than NZD60,000 in a 12 month period to consumers are also required to register for GST.
Is voluntary registration possible?
Yes.
Is voluntary registration available for an overseas company or a fiscal representative?
Yes, if the overseas company is making taxable supplies in New Zealand or if the overseas company wishes to claim GST on expenses, even if they are not making taxable supplies in New Zealand.
VAT/GST compliance
What is the typical frequency of returns?
Every 6 months if the value of total taxable supplies is less than NZD500,000 in a 12-month period and Inland Revenue Department approval has been granted. Every 2 months if annual taxable supplies are NZD24 million or less. Monthly if annual turnover (including group turnover) is greater than NZD24 million.
Businesses can elect to apply a taxable period of every month, 6 months or 2 months if Inland Revenue Department approval has been granted.
Non-resident suppliers of low-value goods or remote services need to file returns on a quarterly basis.
VAT/GST recovery
Are there any items that a registered business cannot recover GST on?
GST is not recoverable on expenses to the extent that they are incurred to make exempt supplies.
GST is not recoverable on entertainment expenditure to the extent that the expenditure is treated as non-deductible for income tax purposes.
Can an overseas company recover GST if it is not registered?
No.
How long does it typically take to obtain a GST refund following a return filing?
2-3 weeks.
Invoices
Are there specific requirements for the content of invoices to be considered valid for GST purposes?
Yes, a valid tax invoice must normally contain the words ‘tax invoice’ in a prominent place; the name and registration number of the supplier; the name and address of the recipient (unless the value is less than NZD1,000); the date upon which the invoice is issued; a description of the goods and services supplied; the quantity or volume of the goods and services supplied (unless the value is less than NZD1,000); and the amount of GST charged.
Special indirect tax rules
Rulings
Is it possible to apply for formal or informal advance rulings from the tax authority?
Yes, it is possible to apply for a public, private or product ruling. Additionally, indicative opinions on the GST consequences of a transaction can be obtained by writing to the Inland Revenue Department, but are not binding.
Other indirect taxes
Disclaimer
All information within this guide is provided by KPMG professionals in New Zealand and based on information available as of September 2019.