GST (Goods and Services Tax) is a tax applied on the consumption of goods and services in New Zealand. It was introduced on 1st October 1986, and since then, it has been a crucial source of revenue for the government. In this blog, we will explore GST and its rates in New Zealand and when they apply.
What is GST?
GST is a tax on the supply of goods and services in New Zealand. It applies to most goods and services provided by registered businesses in New Zealand, including imported goods and services. The tax is collected by the registered businesses on behalf of the government and paid to the Inland Revenue Department (IRD).
GST Rates in New Zealand
There are currently three GST rates in New Zealand:
Standard Rate – 15%
The standard rate of GST in New Zealand is 15%, and it applies to most goods and services. It is the most common rate and applies to most goods and services, including food, clothing, and services such as legal and accounting services.
Zero Rate – 0%
The zero rate of GST applies to specific goods and services, including exports, international transport, and certain primary products such as fresh fruits, vegetables, and meats.
Exempt Supplies
Some goods and services are exempt from GST, meaning no GST is charged on these goods and services. Examples of exempt supplies include financial services, residential rental properties, and most healthcare services.
When does GST apply in New Zealand?
GST applies when a registered business supplies goods and services in New Zealand, and the value of the supply exceeds NZD $60,000 per year. GST applies to most goods and services, including those that are imported, sold or provided by a business.
The standard rate of 15% applies to most goods and services, while the zero rate applies to specific goods and services as mentioned earlier. Some goods and services are exempt from GST, meaning no GST is charged on these goods and services.
In conclusion, GST is an essential source of revenue for the New Zealand government, and its rates and application are crucial to understanding the country’s tax system. It is important for businesses to ensure they are registered for GST, charge GST correctly, and meet their GST obligations.
If you have any questions about GST, please consult with us to ensure you are meeting your GST obligations.
