Registering for GST is surprisingly easy and usually only takes a few minutes. This practical guide covers the basics about what GST is, who needs to register for GST, and provides step-by-step instructions for registering for GST. Let’s get started.
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What is GST?
GST (Goods and Services Tax) is a 15% tax added to the price of most products and services. Most things you buy have GST added to the price.
When you sell products or services you might need to add GST to your prices and pass the GST to the IRD when you file your GST returns.
You can claim the GST back on your expenses. When filing your GST return, you work out the difference between the amount of GST you collected on your income and the GST you paid on your expenses. If you collected more GST than you paid, you pay the balance to the IRD when you file your GST return. If you paid more GST than you collected, you can get a GST refund from the IRD.
You can choose to file and pay GST returns monthly (12 returns per year), 2-monthly (6 per year) or 6-monthly (2 per year).
Do I Have to Register for GST?
You do not have to register for GST just because you start a business. However, you do need to register for GST if you made over $60,000 in the last 12 months, or if you expect you will make over $60,000 in the next 12 months.
The $60,000 income limit does not include the following income types:
- Salary and wages
- Benefits, pension and student allowance
- Long-term rental income (short-term rental should be included)
- NZ interest
How to Register for GST
You can register for GST on the IRD website at any time:
- Log into myIR.
- Select the ‘I want to…‘ tab.
- Select ‘Register for new tax accounts‘.
- Select your IRD number.
- Select ‘Goods and services tax (GST)‘.
- Enter your Contact details.
- Confirm or enter your Address.
- Confirm or add your Bank details for receiving any GST refunds.
- Confirm or enter your BIC code. Your Business Industry Classification (BIC) code tells ACC what type of work you do and is used to calculate the amount of ACC you need to pay. If you don’t have a BIC code, use the online BIC code finder. If you work different jobs in different industries, use the BIC code that relates to your main job.
- Review and confirm your general info.
- Select Yes to confirm you are conducting a taxable activity. E.g. earning self-employed income, company income, schedular payments or rental income.
- Enter your GST specific information.
- Are you registered for Listing Services? – This question applies to listing services operators, such as Airbnb, Uber and Bookabach etc. Select ‘No’ unless you operate a listing service.
- Is/will GST be built into your prices? – Select ‘Yes’ if you will include GST in your prices (GST inclusive) or select ‘No’ if you will add GST on top of your prices (GST exclusive).
- Select your return filing frequency and accounting basis.
- Filing frequency – Refers to how often you need to file your GST returns. The default is ‘Two-monthly – periods ending in odd months’ and this is the recommended option in most cases. If you’d like to file GST more often you can select monthly, or if you want to file less often select ‘Six-monthly’. If you select six-monthly you will also need to select the filing months. The filing months refer to the last month of the GST periods. ‘March and September’ is usually the best option because it aligns with the financial year.
- Accounting basis – Refers to when you account for GST. With the ‘Payments basis (cash)’ option, GST is calculated on your transactions (when you receive the money). With the ‘Invoice basis (accruals)’ GST is calculated when you issue the invoice (when you don’t yet have the money). 80% of businesses use the payments basis, because it prevents you from getting caught out having to pay GST on income that you might not have received yet.
- Enter your business information.
- Are you an exporter? – Do you export goods out of New Zealand to overseas markets.
- Are you an importer? – Do you import goods from overseas into New Zealand.
- Exempt supplies –Exempt supplies are certain goods and services that are not subject to GST. This means that no GST is charged on these supplies, nor can GST be claimed back on expenses incurred to generate these supplies. Exempt supplies mainly include financial services, residential long-term rental and the sale of fine metals.
- That’s it. Review and confirm your GST details.
What’s Next
IRD will process your request within 10 working days. Your GST account will then show in your myIR once IRD have confirmed your registration. Your GST number will be the same as your IRD number.
Once you’ve registered for GST you’ll then need to:
How Solo Can Help
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