Goods and Services Tax (GST) is one of the most important taxes for New Zealand businesses and affects all NZ consumers. This guide explains everything you need to know — from how the 15% rate works to when you must register and how to file.
NZ GST is 15% on most goods and services. If you're a consumer, GST is already included in the prices you see in shops — no extra action needed. If you're self-employed or running a business with more than $60,000 in annual turnover, you must register for GST, charge 15% on your sales, and file regular GST returns with IRD.
What Is GST?
Goods and Services Tax is a value-added tax collected at each stage of the supply chain, but ultimately borne by the end consumer. It was introduced in NZ on 1 October 1986 at 10%, raised to 12.5% in 1989, and increased to the current 15% on 1 October 2010.
Unlike many countries, NZ’s GST is broad-based with very few exemptions — most goods and services sold in NZ attract the full 15% rate, including food.
How it flows through the supply chain:
- A manufacturer sells goods to a retailer for $100 + GST ($115). They pay $15 GST to IRD.
- The retailer sells to a consumer for $200 + GST ($230). They collect $30 GST, claim back the $15 they paid, and remit $15 to IRD.
- Total GST paid to IRD: $30. The consumer bears the full cost.
GST for Consumers
As a consumer in NZ, GST is straightforward:
- All displayed retail prices are GST-inclusive — what you see is what you pay
- You cannot claim GST back on personal purchases
- GST is embedded in your grocery bill, petrol, electricity, and virtually every service fee
The only consumer action needed is awareness — when comparing prices, ensure you compare GST-inclusive figures. Some B2B (business-to-business) prices are quoted ex-GST with “plus GST” in the fine print.
GST for Self-Employed and Businesses
If you earn income from self-employment, contracting, or running a business in NZ, GST may apply to you:
Do You Need to Register?
You must register for GST if your taxable supplies (sales/income) exceed $60,000 in any 12-month period or if you expect to exceed this threshold.
You may register voluntarily if your turnover is below $60,000 — useful if you have significant GST expenses you want to claim back.
If you don’t register when required: IRD can backdate your registration and require you to pay the GST you should have charged (at your own cost), plus penalties.
What Counts as Taxable Supply?
Most business income is a taxable supply:
- Sales of goods
- Professional services, consulting, coaching
- Contracting/freelance income
- Rental of commercial property
- Sale of business assets
What is NOT a taxable supply:
- Residential rental income (exempt)
- Salary and wages (you’re an employee — no GST)
- Exempt financial services
How to Register
Register online at myir.ird.govt.nz. You will need your IRD number, business details, and your preferred GST return period. Registration typically takes 1–2 business days.
Filing GST Returns
Once registered, you must file GST returns and pay any GST owing to IRD. The filing frequency depends on your turnover:
| Annual Turnover | Filing Frequency |
|---|---|
| $500,000+ | Monthly |
| $24,000–$500,000 | Two-monthly (every 2 months) |
| Under $24,000 | Six-monthly (every 6 months) |
| Any (by election) | Monthly |
The GST Return Formula
GST to pay = GST collected on sales (output tax) − GST paid on purchases (input tax)
If your input tax exceeds output tax (e.g., you had a big month of business purchases), you get a GST refund from IRD.
Example (two-monthly period):
- Sales of $20,000 ex-GST → $3,000 GST collected
- Purchases of $8,000 ex-GST → $1,200 GST paid
- GST to pay to IRD: $3,000 − $1,200 = $1,800
Valid Tax Invoices
To claim input tax credits, you need valid tax invoices from your suppliers. Requirements:
| Supply Amount | Invoice Requirements |
|---|---|
| Under $50 | No invoice required |
| $50 – $1,000 | Simplified tax invoice (GST number, date, description, GST-inclusive amount, GST content) |
| $1,000+ | Full tax invoice (supplier name, GST number, date, description of supply, buyer name/address, quantities, prices, GST amount) |
Important: Keep all tax invoices for 7 years (IRD may audit and request them).
GST and Residential Property
Residential rental income is exempt from GST — you do not charge GST on rent and cannot claim GST on residential rental expenses. This is a common source of confusion:
- Residential landlord: Not required to register for GST on rental income (even if rent exceeds $60,000/year)
- Commercial landlord: Must charge GST on commercial rent if registered
- Property development for sale: May be subject to GST if you build and sell residential properties as a business activity
If you are developing and selling new residential homes, GST may apply. IRD has specific rules around property — consider advice from a tax professional.
GST on Imported Goods and Services
Since 2016 (services) and 2019 (goods), overseas suppliers must collect and remit NZ GST on supplies to NZ consumers:
- Digital services (Netflix, Spotify, Adobe, software subscriptions): 15% GST charged by the overseas supplier
- Imported goods under $1,000: 15% GST charged at point of sale by the platform (e.g., Amazon, eBay)
- Imported goods over $1,000: GST and customs duty collected at the NZ border by NZCS
Frequently Asked Questions
Does NZ GST apply to food?
Yes — unlike Australia’s GST-free fresh food category, NZ applies 15% GST to virtually all food. There are no grocery exemptions. This has been a recurring policy debate but the broad base has been maintained since GST was introduced.
What is the difference between zero-rated and exempt for GST?
Zero-rated: GST applies at 0% — the supply is included in your GST return but at 0%. You can still claim input tax credits on related expenses. Example: exported goods.
Exempt: The supply is outside the GST system entirely — you cannot charge GST and cannot claim input tax credits on related expenses. Example: residential rent.
What happens if I miss a GST return?
IRD charges late filing penalties and use-of-money interest on late payments. The initial late filing penalty is $250 (returns under $100,000) plus a further 1% of unpaid tax per month for late payment. File as soon as possible — IRD is generally reasonable if you contact them proactively.
Do I charge GST on my freelance income in NZ?
If your total freelance/contracting income exceeds $60,000 in any 12-month period, you must register and charge 15% GST. Below $60,000 you may register voluntarily. If unregistered, you cannot charge or claim GST — make sure your quotes are clear about whether they are GST-inclusive or exclusive.
Is there GST on KiwiSaver?
The underlying management fees charged by KiwiSaver providers are not directly GST-deductible for members (they are charged inside the fund). IRD has complex rules around financial services and PIE funds. In practice, most KiwiSaver investors need not worry about GST separately — it is handled within fund accounting.