Starting a business: What registrations might you need to complete?
Starting a business - registering for GST
Goods and services tax (GST) is a tax on most goods and services in New Zealand. It also applies to imported goods and certain imported services. It is charged and accounted for at 12.5% on the selling price or market value of goods and services you provide.
GST is not a tax on your business income. Your customers pay this when buying your goods and services.
Registering for GST
You are required to register when your business turnover:
- for the last 12 months was $60,000 or more, or
- for the next 12 months you expect it to be over this threshold
A guideline to gauge whether you are required to register is a turnover of $5,000 a month.
Note: If your annual turnover is less than $60,000, you may voluntarily register.
To register see our "Get it done online" service or "Forms and guides" sections
Accounting for GST
When you register you have to choose how you are going to report your GST transactions to us and record them in your bookkeeping system. There are three options:
| invoice basis |
You claim GST when you receive an invoice or pay the bill, whichever comes first. You account for GST when you issue an invoice or receive a payment, whichever comes first. |
|---|---|
| payments (or cash) basis |
Generally you account for GST in the taxable period you make or receive the payment. To use the payments basis you must meet one or more of these conditions:
Remember that you need to hold a tax invoice in most cases to claim a tax credit. If you make a supply with a value over $225,000 (including GST) you must use the invoice basis for that sale unless the supply is for the sale and purchase of property and requires settlement under one year. |
| hybrid basis |
You claim GST when you pay the bill for your expenses. You account for GST when you issue an invoice or receive a payment, whichever comes first. Any GST-registered person can choose to use the hybrid basis, but if you're currently using another basis you must apply to us in writing and get our approval before you change to it. |
How often do you file a GST return?
Once you have registered for GST you are required to file GST returns on a regular basis, this is called a taxable period. Your GST return and payment are due on the last working day of the month following your taxable period, except the GST payment and return which would normally be due on the last working day of December is due instead on 15 January. If 15 January falls on a weekend, then the payment and return will be accepted as in time if we receive it on the next working day.
The taxable periods are:
| One month |
Returns are filed monthly and this option is available to all GST-registered persons. Businesses whose taxable supplies are worth over $24 million are required to use this option. |
|---|---|
| Two month |
Returns are filed on a two-monthly basis and you can choose which month you want your period to end:
This option is allocated to you if you do not elect your own option. |
| Six monthly | You can only use this option if the total value of your taxable supplies in any 12 months is not likely to be more than $500,000. |
Need more help?
Our business tax information officers or Maori community officers offer free advice on operating a GST-registered business.
Date published: 31 Mar 2009
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