How does the GST system work?

Goods and services tax (GST) is added to the price of most products and services. If you’re GST registered, you can claim back the GST you pay on goods or services you buy for your business. You can also charge GST (15%) on what you sell — this is collecting it on the government’s behalf.

To claim the GST you have paid, you need to complete a GST return. If there’s GST to pay, you pay this amount to Inland Revenue. If there’s GST to be refunded, Inland Revenue will pay you this amount.

Businesses not registered for GST can’t charge GST on their sales and income, or claim back the GST on their purchases and expenses.

For an video with an overview of the system click here

If you have any questions please contact your RightWay accountant, email info@rightway.co.nz or call 0800 55 024