Once registered, you can manage and pay GST online using myGST, a new section of Inland Revenue’s myIR service. Keep a record of all your invoices and expense receipts (and keep these records for seven years). Put aside any GST payments you receive to pay to Inland Revenue at return time. Remember — you’re just collecting GST on behalf of the government, and you’ll need to pass on that GST when you do your return. Whether you’re a sole trader, contractor, in partnership or a company, as soon as you think you’ll earn more than $60,000 in 12 months, you must register for GST. Visitors to New Zealand may be able to get a refund of the New Zealand VAT tax paid on any goods bought for deportation.

• GST registration is crucial, especially for businesses exporting goods and services, as they can zero-rate their exports.
• There are two ways of paying for the NZeTA and IVL, either through an Immigration New Zealand app or their website.
• For your main source of income, with no New Zealand Student Loan, your tax code will likely be ‘M’.

You can work out which type of business suits your situation at the business.govt.nz website. You can see the amounts and types of taxes collected, as well as what the Government spent, by checking the financial statements the Treasury makes available. As a permanent employee, your boss will take care of pretty much everything once you have signed up and processed all of the paperwork.

How do you work out the GST amount of a price?

Whether part-time or full-time, if you are working on an ongoing basis for a set number of hours each week for the foreseeable future, it is likely you are a permanent employee. The last point above is the most important as it meets your obligations under the Anti-Money Laundering and Counter Financing of Terrorism Act to prove that you are a legitimate person with a verified identity. It is a quick and easy process to open a bank account once you are in the country. Any of the major banks should be able to open it for you on the spot provided you have everything that they need to be satisfied in verifying your identity. Most banks do not allow to you finalise the account opening process without being in branch to be verified by a bank employee. As with all bureaucratic processes, this can often take some time to get sorted so getting on to it as soon as possible is your best option if you plan to start working soon after touching down in New Zealand.

• Late filing penalties are imposed if GST returns are not lodged by the due date.
• The IVL costs NZ$35 and you will pay this either when you request your NZETA or when you apply for your Visitor Visa.
• For example, persons who earn $70,000 will pay only 30% on the amount that falls between $48,001 and $70,000 rather than paying on the full $70,000.
• This means, for her May operations, Sarah will need to remit $2,520 to the New Zealand Inland Revenue Department (IRD) as part of her GST return.
• Individual taxes are one of the most prevalent means of raising revenue to fund government across the OECD.

A provisional tax payer is a person or a company that had a residual income tax of more than $5000 in the previous financial year. In light of COVID-19, from the 2021 tax year onwards, the provisional tax threshold was increased from $2,500 to $5,000. In most cases employers deduct the relevant amount of income tax from salary and wages prior to these being paid to the individual. This system, known as pay-as-you-earn, or PAYE, was introduced in 1958, prior to which employees paid tax annually.

GST threshold

Unlike the United States’ sales tax, which is only charged on sales to end consumers, the VAT is collected on all sales – even of raw materials. An IRD Number is a necessary thing for everyone who works, owns property or otherwise generates a living in New Zealand. It is an eight to nine-digit code that will universally identify you and your tax deductions to the IRD across your daily employment, bank savings accounts and will aid with links through to other services like ACC and KiwiSaver. In this more detailed example, John has a net GST payable of $50,850 for the period. This is the amount of GST he is required to remit to the New Zealand IRD when he files his monthly GST return. Apart from non-resident remote service providers, GST returns may be filed monthly, bi-monthly or six-monthly depending on the level of taxable supplies in a 12-month period.

International indirect tax guide

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How to Transfer Money to Your New Zealand Bank Account

Taxes can be an intimidating and confusing topic, especially in a foreign language! Yes, New Zealand has an annual sales registration threshold of NZD 60,000, based on local sales. Although the system is voluntary, eligible persons are automatically enrolled and can choose to opt out after the first two weeks of work in the scheme. If you are not entitled to stay in New Zealand indefinitely, make sure your employer knows this and does not automatically enrol you. Getting back deductions that have been taken in error can be a time-consuming process as KiwiSaver deductions were only designed to flow one-way until you are 65 years old. KiwiSaver is a voluntary (opt-out) long-term savings scheme for New Zealanders.

The IVL is said to be “a way for travellers to contribute directly to the tourism infrastructure they use and to help protect and enhance the natural environment”. Established in 1986, the Goods and Services Tax (GST) is a tax on almost anything you purchase in New Zealand. It is an inherent part of your trip here, whether you notice it or not. You’ll need to do this before you file or approve your end-of-year tax return.

Our globally integrated teams give you the perspective and support you need to manage VAT, GST and SUT effectively. Travellers departing on a cruise ship are charged a Customs levy of NZ$4.55. Travellers arriving on a cruise tax evasion legal definition of tax evasion ship are charged a Customs levy of NZ$11.48 and a biosecurity levy of NZ$10.58. You may not realise it, but an arrival and departure tax is added to the cost of your flight or cruise ticket to and from New Zealand.

This guide includes everything you need to know about digital tax laws in New Zealand, whether your customers live in Auckland or Otago. It’s good to check the lists of income types for both individuals and businesses. This way, you can make sure you’re paying the right tax on each type of income you earn. Casual employees are a popular choice for a number of businesses in NZ, particularly in the service and hospitality industries.

For example, persons who earn $70,000 will pay only 30% on the amount that falls between $48,001 and $70,000 rather than paying on the full $70,000. Consequently, the corresponding income tax for that specific income will accumulate to $14,020 – which amounts to an overall effective tax rate of 20.02% of the entire amount. Well, the threshold amount refers to your total sales in the country, during any 12-month period. This can be a calculation of sales in the last twelve months, or a prediction of sales in the next twelve months — any rolling year-long period, past or future. You’ll see that if you’re self-employed or unincorporated, you’ll be using the rates for individuals.

Customs duty is levied upon the importation of certain goods into New Zealand. Unlike other indirect taxes, such as GST, once duty has been paid it is not recoverable by the importer. Businesses in New Zealand are required to collect a sales tax of 13.00% on behalf of the government, which they must submit to the applicable New Zealand revenue department in a periodical VAT tax return.