Understanding the Zero Rate GST in New Zealand

Every country has its own set of rules for the GST with proper guidelines. Here, we will be looking particularly at the GST return in New Zealand. There have been many updates in the taxation applicable here. The GST slabs vary from one good to another and from one service to another. The taxable activity affects the businesses to much extent. The GST rules in New Zealand keep changing over a specific period. It is important to understand the zero rate GST applicability in New Zealand.

What is GST?

Goods and Services Tax (GST) is the tax applicable for the products and services. If you are paying the GST for buying the goods and services then you can claim back the GST, if you are registered GST.

How does the GST work in New Zealand?

There are two choices for you when you register for the GST in New Zealand.

1. Period of taxation

The period of taxation can be monthly, two-monthly, or six-monthly.

2. Basis of Accounting with options like,

(i) Invoice – Whenever you send or receive an Invoice then you are accountable for the taxable GST. This will be applicable even in the case when the payment is not made. (ii) Basis of the payment – Period of the taxation when the account is made or received. (iii) Hybrid method – It is a combination of the invoice and the payment methods.

How is the registration for the GST done?

When doing the registration through online mode, you’ll need different information like:

• The business industry classification (BIC) codes
•  IRD number.
• To know the taxable period like monthly, two-monthly, six-monthly for the small business.
• To know the basis of the accounting while receiving the payment from the customers.

What is exempt from GST in New Zealand?

New Zealand Inland Revenue has proper guidelines for zero rates GST. It explains the goods and services tax GST for different things along with following the special rules along with the transactions. The zero rates can be applied for the different supplies like refined fine metal, exported goods, land transactions, non-profit body land acquisition, vessels exported (aircraft and boats), providing financial services, pleasure craft which is foreign-based, household goods, temporary imports, internet sales, people transportation, etc. The zero-rate GST applied on many of such items has many of the terms and conditions to consider. These goods which are charged 0% GST are called exempt supplies for GST. Most of these products are sold overseas along with exports. Although it is zero-rated, the supplies must be recorded on the GST returns. GST zero-rate supplies in New Zealand must be considered carefully to ensure proper filing of the income tax. It is a little tedious to do the GST return for the products which are exempted from the GST. So, getting the expert service for filing the tax return with GST is crucial here. They can guide you properly as per the rules applicable. Meru Accounting provides tax return filing along with the zero-rate GST in New Zealand properly. Meru Accounting is a well-known accounting service providing company across different countries in the world.