GST in New Zealand:
A Complete Guide for Small Business Owners

Goods and Services Tax (GST) is a 15% tax applied to most goods and services sold in New Zealand. Understanding GST is essential for every business owner — whether you're just starting out or have been trading for years.

When Do You Need to Register for GST?

You must register for GST if your turnover exceeds — or is expected to exceed — $60,000 in any 12-month period. This is called the registration threshold.

You can also choose to register voluntarily if your turnover is below this threshold. Voluntary registration can be beneficial if your customers are GST-registered businesses (since they can claim back the GST you charge) and if you want to claim GST on your business expenses.

How Does GST Work?

When you're GST-registered, you add 15% GST to your prices and collect it from customers. You also pay GST on most of your business purchases. The difference between the GST you collect (output tax) and the GST you pay (input tax) is what you either pay to or receive from IRD.

If you collect more GST than you pay, you owe the difference to IRD. If you pay more than you collect, IRD refunds the difference to you.

GST Return Periods

Depending on your annual turnover, you'll file GST returns on one of three schedules:

• Monthly — if your turnover exceeds $24 million
• Two-monthly — the most common option for small businesses
• Six-monthly — available if your turnover is under $500,000

Returns are due by the 28th of the month following the end of the return period. Late filing and late payment attract penalties and interest, so it's important to stay on top of deadlines.

What Can You Claim GST Back On?

You can claim back GST (input tax credits) on purchases made for use in your taxable activity. This includes:

• Business supplies, equipment, and materials
• Professional services (accounting, legal, consulting)
• Vehicle expenses used for business purposes
• Business-related software and subscriptions

You cannot claim GST on private or domestic expenditure, or on purchases from unregistered suppliers.

Common GST Mistakes to Avoid

• Not registering on time — if you pass the $60,000 threshold you must register within 21 days, or IRD can register you retrospectively and hold you liable for uncollected GST.
• Claiming GST without a valid tax invoice — for purchases over $50, you need a valid GST tax invoice to claim the input credit.
• Getting the filing date wrong — always check your specific filing dates and set calendar reminders well in advance.
• Not accounting for GST in your pricing — if you're GST-registered and forget to include GST in your price, you still owe it to IRD. Always price GST-inclusive or clearly state GST-exclusive prices.