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GST News - 2005

GST News September 2005

Welcome to GST News

We send you this newsletter twice a year, in September and March, to tell you about Inland Revenue services, tax law changes and topical issues relating to GST.

If you have a GST topic you'd like to see covered in this newsletter, please write to the Editor, GST News, PO Box 2198, Wellington or email us at gst.news@ird.govt.nz and we'll aim to cover the topic in a future edition.

Please pass this newsletter on to the person who deals with GST in your business.

Business consultation website

Business people wanting to comment on government regulations will find it easier to do so with a new website launched this month by the Ministry of Economic  Development (MED).

The website allows business operators and others interested in business to register their interest in providing input on regulations being considered by government agencies.

You can register to receive information about regulations being publicly consulted on, and/or register to be contacted directly by the government agencies seeking input.

Through MED government agencies will draw on the database when seeking to consult with business stakeholders.

You will be able to choose how you are consulted; via email, post, phone or face-to-face. To ensure you are not contacted more than you want, the website is designed so that:

  • you will only be asked for input on aspects you are interested in
  • you can specify the number of times per year you wish to be consulted.

For more information or to register, go to business consultation.

Thinking of entering or expanding your business into Australia?

Information to help New Zealand and Australian businesses with their tax affairs has been added to our IRD website and the Australian Taxation Office's (ATO) website.

The web material has been developed as a joint initiative between us and the ATO after consultation with businesses and their advisors here and in Australia. The web material is designed to provide better access to information about tax requirements and administrative issues for businesses trading across the Tasman.

Check these out

Information for New Zealanders conducting business activity in Australia.
Australian Tax Office - Businesses.

Withholding payments and GST

If you are in business and hire a salesperson on a "contract for service" you should pay them withholding payments and deduct withholding tax. Withholding payments are payments made to people who are not employees but who are employed on a contract-for-service-basis. The Tax Code declaration (IR330) form contains a list of all the occupations subject to withholding tax and the amount deducted from each dollar earned.

If they are also registered for GST, they will charge GST on goods and/or services supplied. This means their gross earnings will increase by the GST charged.

Withholding tax is deducted even if the person is registered for GST. The only time you don't need to deduct withholding tax is:

  • if you've been provided with a certificate of exemption
  • for payments to non-resident contractors if they are payment slip
  • for payments to non-resident contractors if they are allowed total relief from tax through a double tax agreement, and are present in New Zealand for a total of 92 days or less in any 12-month period
  • for payments of $15,000 or less in any 12-month period, to or for the contract activities of a non-resident contractor
  • for payments to Maori authorities, public authorities and local authorities relating to any work or service performed by them
  • for payments made to a company (but not a company that is a non-resident contractor or that is a non-resident entertainer) in relation to any work or services performed by it.

When you recieve a tax invoice or you create your own tax invoice (as approved by us) you'll need to work out and deduct withholding tax on the amount  excluding GST.

Keeping tax invoices

It is important to keep good records. It will save you time and money. If your book keeping is up-to-date it will also be quicker to file your GST returns. It is important to make sure you hold tax invoices for all supplies over $50. We thought it might be helpful to remind you exactly what needs to be on a tax invoice.

What needs to be on a tax invoice for GST?

Supplies of $50 or less
You don't need a tax invoice, but we suggest you keep records such as invoices, vouchers or receipts for these purchases. As a minimum, you should keep a record of the date, description of the supply, cost and name of the supplier.

For supplies between $50 and $1,000
Your tax invoice should show the:

  • words "tax invoice" in a prominent place
  • name and GST registration number of the supplier
  • date of issue
  • description of the goods and/or services supplied
  • total amount payable for the supply and a statement that  GST has been charged.

For supplies over $1,000
Your tax invoice should show the:

  • words "tax invoice" in a prominent place
  • name and GST registration number of the supplier
  • customer's name and address
  • date of issue
  • description of the goods and/or services supplied and the quantity
  • amount charged and GST applicable or a statement that  GST is included in the final price.

Multiple supplies
A tax invoice may contain details of more than one supply. A common example would be the leasing of commercial premises. While each supply on an invoice must be separately identified, there is no need to show the GST for each supply separately-a total of all supplies will do.

GST refunds

We have been asked if GST refunds can be off-set against other tax liabilities. The simple answer is, yes. You can transfer your GST refunds to any other tax liabilities you may have such as income tax or PAYE. The quickest and easiest way to do this, is by filing your return online through our website under Get it done online

Filing your return online
When you file your return online, you can note you want to transfer your refund at the end of the return. At Question 16, tick Yes, you have information to add. You will then be given the option Transfer of any refund. Select this option and include a note in Box 16b requesting the transfer.

Posting your return
If you complete the paper return and post it back, you can include a note with your return requesting the transfer.

Sending back your return

If you have misplaced our reply envelope you can go to our website and file your return online. If you don't have access to the internet, send your return and payment to one of our postal addresses below. Please do not post cash.

Postal addresses for payments

If you live in:

Northland
Inland Revenue
Southern Processing Centre
PO Box 3574
Christchurch

Auckland
Inland Revenue
Northern Processing Centre
PO Box 1535
Hamilton

Other North Island areas
Inland Revenue
Central Processing Cetnre
PO Box 39050
Wellington Mail Centre

The South Island
Inland Revenue
Southern Processing Centre
PO Box 3754
Christchurch

You can also find our postal addresses in your local telephone directory and on our "contact us" page

New to business?

Individuals who make voluntary income tax payments in the year before they have to start paying provisional tax can now receive a 6.7% tax discount. For more information go to Business income tax basics or call us on 0800 377 774.

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Other issues this year

GST News March 2005

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Date published: 31 Aug 2005

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