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VAT Registration in New Zealand

VAT Registration in New Zealand

The goods and services tax, the New Zealand equivalent of the value-added tax, is levied on most products and services. If a company is a VAT payer, it is registered and assigned a VAT number in NZ.

Businesses, both foreign and local, are not automatically required to register for the GST or VAT. It is only applicable once the company has exceeded a certain annual threshold and only for some types of goods and services.

Obtaining the VAT number in New Zealand when needed is easier with the help of a team of specialists, such as our NZ company formation agents.

In this article you can read more about the GST (VAT) number and will find answers to the common rates as well, however, when you need assistance with registration or answers to other, personalized questions, we encourage you to reach out directly to us.

The 2024 goods and services tax remains the same in New Zealand, both for its standard rate, and for its reduced rate. If you would like to know more than the information presented herein, our team can answer your questions.

New Zealand VAT registration for foreign companies

Non-resident companies that supply goods or services in New Zealand are also required to register for VAT purposes when their annual turnover is over the $60,000 a year threshold. This is the same threshold that applies to resident companies.

A business is considered a non-resident for GST purposes when it does not have a permanent place of business/fixed place of business in New Zealand that is related to the taxable activity it engages in.

Goods and services are considered to be supplied in New Zealand by the non-resident company in the following cases:

  • the goods are in NZ at the time of the supply; they are not distantly taxable goods;
  • the goods are distantly taxable goods and they are not treated as being supplied outside New Zealand;
  • the services are physically offered in NZ by an individual who is in the country at the time the services are performed;
  • they are remote services that are supplied to an NZ resident, other than the services performed physically in the country by a person who is in NZ at the time of such performance of services.

In some cases, the supply of goods or services can be treated as being made in New Zealand even if ordinarily it would not be treated as such when:

  • the goods or services are supplied by a non-resident to a resident;
  • the recipient of the supply estimates that the percentage of the intended use of goods is less than 95% at the time of the acquisition or determines that the actual use of the goods or services is less than 95% (at the end of the adjustment period);
  • the supply would be a taxable one if made in NZ by a registered person in the course of a taxable activity carried out by a taxable person; other situations can also apply.

As seen above, non-resident companies that provide remote services from outside the country to NZ residents may still be required to register. Our team assists foreign companies in this situation, so that they may comply with the registration requirements in force.

Once the company is registered for VAT purposes and has a VAT number in NZ, it will pay the tax and make the needed filings with the Inland Revenue.

Moreover, non-resident companies can claim back GST in some cases.

You can get in touch with our company formation experts in New Zealand if you provide these services in the country in order to find out if you qualify.

New Zealand VAT registration for local companies

The VAT number in NZ is the New Zealand Business Number (NZBN) which is used to globally identify all companies registered in this country. This number is directly connected to the Companies Register as it is assigned when the company is first incorporated.

The number is linked to the most important company details, such as the company’s trading name and registered address. When other companies or individuals search your business, they will find these business details on the NZBN register.

Only a company can have a company number, or a VAT number in New Zealand, however, any business can get the NZBN, including sole traders and partnerships.

The fact that the information included in the Companies Register is shared with the NZBN Register means that companies need to keep their information up-to-date. More on the requirements applicable to businesses regarding reporting can be provided upon request by our team of NZ company formation agents.

In certain limited cases, companies can backdate the start date of their GST registration. This can be possible when the company has been adding GST to the prices of its goods or services but it was not yet registered, or when the company has other reasons to believe that the registration start date should be backdated.

Our team briefly lists the steps followed for VAT registration in New Zealand (GST) in 2024:

  • prepare the company documents: these include the IRD number and bank account details;
  • prepare the needed accounting documents: the turnover for the last 12 months or the expected turnover for the following 12 months in case of voluntary registration;
  • enter the BIC code: this is the business classification code for the company;
  • choose the GST particulars: these are the filing frequency and the accounting basis;
  • the actual registration takes place inside the online portal of the IRD (after the company representatives logs into the online portal);
  • once the submission is completed, the authorities will send a confirmation of receipt.

In most cases, the processing time for New Zealand VAT registration is 10 working days. This can be longer if the authorities deem it necessary to ask the company for additional information or documents.

The GST number will be the same as the IRD number. A registered company will need to start charging GST to its customers as soon as it is registered (unless the backdating of registration applies in its case, as briefly summarized above).

If you want to open a business in New Zealand in 2024, we can answer questions not only concerning the value-added tax and other taxes, but also regarding the employment of staff, intellectual property protection, or the liabilities of the company’s directors and shareholders. You can reach out to us if you have questions about general or particular business matters.

VAT rates and VAT compliance in New Zealand

The VAT or GST rates in New Zealand include a standard rate, applicable to certain types of goods and services, as well as other, reduced rates. Our team of company formation agents in New Zealand lists the most important details about this tax below:

  • 15%: is the standard rate applicable to most types of goods and services;
  • 0%: the reduced rate applicable to some goods and services; these include exported goods, land transactions, certain financial and imported services, online sales, services performed outside NZ (in most cases), transport of people, and others;
  • Exempted: these are goods and services that are not subject to this tax at all; examples include financial services, the supply of fine metals, renting a residential dwelling and others;
  • $60,000: is the registration threshold; if your business earns more than this amount in 12 months you will have to start the registration process.

Company owners can choose how often they will file returns. They can opt for monthly filings, every two months or every six months. The most suitable option depends on the size of the business. For example, in most cases, small businesses will opt to file the returns every 2 months.

The goods and services tax also applies to digital downloads, when these are offered remotely by an offshore supplying company to NZ resident clients. This tax is also in place in case of distantly taxable goods (which cam be referred to as low value goods, and are valued at NZD 1,000 or below), again, when these low value goods are offered by offshore suppliers to customers who are NZ residents. Special rules apply in case of marketplaces and our team can give you more details upon request.

The GST filing dates depend on the company’s chosen taxable period. Some examples include the following:

  • 27 February – GST return and payment when the taxable period ends on 31 January;
  • 27 March – for the taxable period ending in February;
  • 06 May – for the taxable period ending 31 March;
  • 28 July – for the taxable period ending 30 June;
  • 27 August – for the taxable period ending 31 July.

GST filing for every taxable period is mandatory, even if the filing is nil. The payment is made on the same day as the filing.

Special types of registrations apply in the case of certain types of businesses, such as branches in the country.

In this case, the legal entity will need to include the turnover for all the branches or divisions in the set of documents submitted for GST registration in New Zealand.

Companies with branches that register for GST can either register as a single entity or they can register each branch or division separately and in this case, each branch will have its own GST number.

When registering branches separately, this means that each branch will use its own GST number on invoices, will keep its separate GST records, and file its own, separate GST returns.

GST registration is also possible as a group in some cases. For companies that are part of such a group, an advantage can be that the compliance costs may be reduced.

You can reach out to us if you need details on the VAT number in NZ for branches.

Businesses that make less than $60,000 a year can opt for voluntary GST registration. It is important to note that once a business in New Zealand is registered for GST it will charge this tax to the customers, will file the mandatory returns, will pay the owed tax, and will need to keep GST records. The refund is available to those businesses that paid more GST than they collected. 

We provide complete assistance to business owners in the country who are just starting their own company or who have already registered their business and need assistance with various issues.

GST collected in New Zealand

Statistical data on GST collection reveals that:

  • In the year ending on March 2023, the total net IRD GST collected had a value of $24.871 million, which is an increase of 0.8% compared to the same period a year prior;
  • In the 2023 tax year, there were 655,588 registered GST taxpayers, a small decrease of 0.5% from the 2022 tax year.

For all matters relating to the set up of a company in New Zealand, please reach out to our team. VAT registration is preceded by a number of steps concerning the incorporation of the business, most notably its registration with the Companies Register. If you have questions about the initial incorporation phase, please reach out to our team for personalized answers.

If you would like to know more about the VAT number in New Zealand, the registration steps in 2024, or the applicable GST requirements depending on the type of company you run, please contact our NZ company formation agents.