If you’re registered for GST, you may need to pay GST on grants and subsidies from the Crown or public authorities.
You must register for GST if you’re doing a taxable activity and your total annual turnover is either:
- over $60,000 in the last 12-month period
- going to be more than $60,000 in the next 12 months.
When you work out your total annual turnover, include any grants, subsidies or barter transactions.
When you do not have to pay GST
There are some grants you may not have to register for or pay GST on.
Capital expenditure grants
If a capital expenditure grant makes your total annual turnover $60,000 or more for the year, you may not need to register for GST.
Unconditional gifts and grants
Some grants given to non-profit bodies are unconditional gifts, especially those given by charitable trusts. You may not have to return GST on grants that are gifts.
Overseas development grants and GST you will have to return
You do not need to return GST for all of your international development grant. You only need to return GST on the part you use for administration and capacity building in New Zealand.
GST on wage grants and subsidies
If you or your organisation are paid a grant or subsidy for wages, this will include GST. If you’re registered or need to be registered for GST, you must include it as income in your GST return.
GST and childcare subsidies
You need to include childcare subsidies in your GST return, for example Work and Income subsidies or OSCAR. These subsidies are not considered unconditional gifts.