Understanding GST for Small Businesses in NZ

GST (Goods and Services Tax) is a key part of doing business in New Zealand. It is a tax added to the price of most goods and services. If your business earns more than the GST registration threshold, you must register and file GST returns.

In NZ, GST is usually 15 percent. When you sell products or services, you charge GST to your customers. Then you pay the collected GST to Inland Revenue. At the same time, you can claim back GST you have paid on business purchases. The difference determines what you owe or what refund you can receive.

To manage GST effectively, keep accurate records of all your sales and purchases. This includes invoices, receipts, and digital records from your accounting software. Regular reconciliation ensures that your GST returns are correct.

GST returns are usually filed every one, two, or six months. The filing frequency depends on your business size and preferences. Filing on time avoids penalties and keeps your business compliant.

It is also important to understand what sales are GST-exempt. Some specific products, services, or exports may not require GST. An accountant can help you understand these rules and make sure you apply them correctly.

Managing GST need not be difficult when you have the right systems in place. Good bookkeeping and professional advice ensure you meet your obligations and make informed financial decisions.