Tax System in New Zealand------- All about GST!


New Zealand initiated a Goods and Services Tax ('GST') on 1 October 1986. This is like VAT and based on the OECD's standard indirect tax regime model. It is one of the most dynamic systems in the world, with a wide base and limited exemptions. GST is collaboratively regulated by the Inland Revenue and Customs.


Key highlights of New Zealand's tax system include:

·         No legacy tax
·         No general capital gains tax, although it can apply to some particular investments
·         No local or state tax, aside from property rates invoiced by local assemblies and authorities
·         No payroll tax
·         No social security tax
·         No medicinal services tax, aside from a very low levy for New Zealand’s Accident Compensation injury insurance scheme (ACC).

How much GST is applied?

The GST rate is 15% applied to all merchandise and services. Some uncommon services are exempt from GST and duty-free offer items tax-free when arriving in New Zealand from an international flight.

What is GST applied to?

As GST is a tax on all goods and services, it will apply to almost everything you buy in New Zealand. That incorporates food, medicine, equipment, the doctor, going to the hairdressers, even the activities you are probably going to do as a traveler in New Zealand.

The couple of notable Exceptions of GST are:
·         Bank administrations, including interest
·         Rent
·         Duty-free items
·         Your wage, which is subject to other expenses

Who needs to register for GST?

Companies with a turnover of $60,000 or more are required to register. You might be an exception if you sell GST-exempt goods and services. You can get into legal issues if you don't register for (and gather) GST when you should.

Advantages of registering

In case you're GST registered, you don't end up paying GST on business expenses. Still, you'll get taxed the GST-inclusive cost when you buy something, yet you can claim that refund when you file your return with the IRD.

What do I need to register?

To register, you'll need:
·         An IRD number (and a my IR online account)
·         A business industry classification code
·         Bank account details of your business


 Choosing your accounting basis:

Your accounting basis decides when you owe GST on sales (and when you can claim it on costs). There are three alternatives, however, they may not all be accessible to you.

·         Payments basis: You owe GST on a sale when you get payment from a client.

·         Invoice basis: You owe GST on a sale when you raise an invoice or when you get paid, whichever ranks at the top.

·         Hybrid basis: You follow the basis of the invoices when working out what GST you owe, and the basis of the payments when working out what you can claim back. It can get confusing so just a couple of businesses utilize the Hybrid basis.

Registering for GST online

It's easy to register for GST yourself and it costs nothing. Simply head over to the IRD site.

When you're registered for GST

When you've registered for GST you'll have to:
·         Add GST to your costs
·         Issue tax invoices to your clients
·         Keep receipts and solicitations to guarantee back GST on costs of doing business
·         File GST refund with the IRD
·         Pay any GST due

How to calculate GST?

The easiest approach to figure the GST is as follows:
Multiply a cost by 3, and afterward divide it by 23.
For example, your grocery shopping for a week is NZ$60…
60 x 3 = 180
180/23 = 7.82
There is NZ$7.82 of GST in your NZ$60 grocery shopping.

Claiming GST (and input tax credits)

GST-Registered organizations can claim back the GST they pay on costs of manufacturing overheads. Furthermore, sometimes, they can claim back GST that they've just paid to the IRD. We should investigate what you can claim back.

When you can claim GST back

·         You can claim GST back when
·         You've obtained goods or services for your business
·         A client leaves you with an awful obligation

As a GST-Registered business, you'll have to tell the government the amount you've collected and the amount you've paid. You do this by submitting a GST return. You'll require a record of the GST amount you gathered on sales, and what amount was paid on the purchase. You won't have to submit tax invoices when you file your GST return, yet you should have them available.

For Further Information, visit www.indianmuneem.com. We’ll help you file your GST Return.

Comments

Post a Comment

Popular posts from this blog

Bookkeeping Outsourcing Company

Image
To maintain your accounting records up-to-date often is a time-intensive and an expensive practice for almost any business, rendering little apparent added value. Are you facing problems in understanding where your money is going? Do you happen to be putting in hours of your precious time and efforts handling the books? Let our team at Indian Muneem help save your time, effort and money, while also minimizing your financial pressure by means of our outsourced bookkeeping services. Indian Muneem (…Believer of simple and smart accounting) is one of India´s leading accounting outsourcing service provider since 2000 that offers end-to-end bookkeeping Outsourcing Services . We at Indian Muneem have invested in the state-of-the-art technologies to provide you seamless bookkeeping outsourcing Company . Our advantage to you involves lowering of administration expenses, reassignment of workforce to concentrate on your primary business pursuits and the certainty that your acc...
Read more

Learn how outsourcing Accounting and Bookkeeping Services can be Beneficial for Your Business

Image
Bookkeeping and accounting are the two significant dialects of business without which no business is complete and able to cope with the daily activities bookkeeping department. Having knack knowledge on the financial situation of a business is very essential for each organization. It tends to be achieved only when a viable accounting system is established. Thusly, having an in-house bookkeeping team is significant for each business.    The job of bookkeeper and accountant can be challenging and tedious as it includes a lot of complex investigations and researches. It is recommended for the SME enterprises to outsource their Bookkeeping and Accounting Services to some expert services provider. However, small business owners neglected to understand the significance of bookkeeping accounting services in Singapore. Let’s have a look at some key advantages of outsourcing Accounting and Tax Outsourcing Services for Singapore . High level of Accuracy/ability: The expe...
Read more

Accounting Outsourcing in India

Image
Indian Muneem is one of the fastest growing Accounting Outsourcing Company in India in the field of KPO for providing Accounting & Financial services. Our accounting professionals are certified in QuickBooks Accounting, Sage Accounting, Microsoft Accounting softwares, SAP, MYOB, Client Bookkeeping Solution, Xero Accounting, Kashflow Accounting, IRIS, Caseware, US Tax Returns, UK Tax Returns, UAE Tax, Singapore Tax, New Zealand and Australian Tax. We are also providing back office Accounting Outsourcing Services in India to CA/CPA’s & ACCA’s in US, UK, UAE, Singapore, Canada, Australia& New Zealand for accounting, bookkeeping, Payroll and tax returns. Indian Muneem provides Accounting outsourcing services to other companies that could also be or usually have been provided in-house. Our Accounting Outsourcing services to your back-office finance and accounting enables the client to focus on their core business while cutting on the costs of company overhead. I...
Read more