Filing GST means that you'll get regular insights on to how your business is doing. You can also only charge GST on your sales and income and claim it back on purchases and expenses if you're GST registered. However, filing GST is extra paper work, and also means that you can receive penalties if you file it late.
You must register for GST if you carry out a taxable activity and:
- your turnover was $60,000 or more in the last 12 months or will be $60,000 or more in the next 12 months, or
- your prices include GST.
As soon as any of these things apply to you, you must register for GST within 21 days. You can also voluntarily register for GST however there are some considerations that apply.
Taxable activity- GST is charged on the supply (sale) of most goods and services in New Zealand and some specified imported services. Supplying or making a supply is your taxable activity.
Turnover- This is the total gross value of all goods and services you sell or provide in New Zealand, excluding GST. It includes exported goods as well as grants, subsidies and barter arrangements. It does not include the sale of stock and assets when you wind down a business, the sale of plant or replacement of assets, GST-exempt goods and services or unconditional gifts.
No need to register for GST
You don't have to register for GST simply because you start a company, have an IRD number, or because you're in business or trading.
Specifically, you don't have to register for GST if:
- your turnover was under $60,000 in the last 12 months or is expected to be under $60,000 in the next 12 months
- your turnover exceeds $60,000 because you have sold business assets due to:
- stopping your taxable activity
- substantially or permanently reducing the scale of your taxable activity, or
- replacing your plant or assets.