Registering for goods and services tax (GST) is an important part of starting a business in New Zealand. Once a business’s annual sales exceed 60,000 New Zealand dollars (NZD), the company is required to charge GST on sales and pay it to the Inland Revenue Department (IRD). You can also claim GST back on your business expenses. To stay on top of how much tax you owe and how much you can recover, you might want to integrate your books, payment systems, and accounting tools.

Below, we’ll explain how GST works for small businesses in New Zealand.

What’s in this article?

• What is GST for small businesses in New Zealand?
  
• How do you register for GST in New Zealand?
  
• How does GST work for small businesses?
  
• How do you file GST as a small business in New Zealand?
  
• How do small businesses claim GST on expenses?
  
• How Stripe Tax can help
  

What is GST for small businesses in New Zealand?

Goods and services tax is a 15% tax on most goods and services sold in New Zealand. Businesses charge customers for it and pass on that amount to the IRD.

Businesses are required to register for GST when their total revenue exceeds 60,000 NZD over any 12-month period, past or projected. That means if your business has obtained a contract that will push you over the threshold in the coming months, you’re obligated to register now, even if you haven’t received the cash.

If you’re approaching the 60,000 NZD threshold, watch it closely. The IRD can register you for GST retroactively. That means you’d owe GST on past sales, even if you didn’t charge it at the time.

You can also choose to register for GST before you earn 60,000 NZD.

This is common if:

• You sell to other GST-registered businesses that expect tax invoices

• You’re investing heavily up front and want to claim GST on your expenses

Registering voluntarily means you’ll need to add 15% tax to your prices and start filing regular returns. If you sell mainly to customers or don’t have a lot of expenses, voluntary registration might not be worth it.

How do you register for GST in New Zealand?

When registration is required or becomes strategically useful for your business, log in to myIR, the IRD’s online portal. The decisions you make during setup determine how you’ll handle GST going forward.

When you register, the IRD will ask for a few details:

• Start date: The start date is the day your business became liable for GST. From this point on, you must charge tax on sales.

• Filing frequency: Small businesses typically file every two months, which keeps payments small and regular. Those with sales of less than 500,000 NZD annually can choose semiannual filing to minimize admin. Businesses with more than 24 million NZD in annual sales are required to file monthly.

• Accounting basis: If your annual revenue is 2 million NZD or less, you can use the payments (cash) basis and record GST only when money enters or leaves your bank account. Larger businesses use the invoice (accrual) basis. They report GST as soon as an invoice is issued, even if the customer hasn’t paid yet.

To submit the application, you’ll need your IRD number (your personal number for sole traders), a New Zealand business bank account, turnover estimates for the past and upcoming 12 months, and your Business Industry Classification (BIC) code. The myIR portal will also ask for your contact details and the filing options you’ve chosen.

In myIR, select “Add a new tax account” and choose GST. Enter your details, confirm your start date and bank account, then submit. The IRD processes new registrations within about 10 working days, although it might request additional information before it confirms your GST number. Once you’re approved, every invoice you issue must clearly state that GST applies and display that number.

Common challenges

Registration mistakes can be expensive to fix. If you start charging GST before the IRD officially registers you, you still owe that tax. And the IRD can backdate your account to the date you became liable. Late registration after you exceed the 60,000 NZD threshold carries similar consequences: you’ll have to pay GST on prior sales, potentially plus interest.

Even small administrative choices matter. Selecting a six-month filing cycle might sound easier, but it also means larger lump-sum payments.

Tracking turnover accurately is the best safeguard. Tools like Stripe Tax can monitor your New Zealand sales and flag when you’re nearing the threshold, which gives you more time to register.

How does GST work for small businesses?

Once you’re registered, you’ll charge GST on sales, claim it for your expenses, and pass the balance to the IRD.

Charging GST

In New Zealand, 15% GST applies to the majority of goods and services. You collect that tax on behalf of the IRD. Many customer-facing businesses quote GST-inclusive prices, while B2B sellers often quote exclusive ones.

Every tax invoice over 50 NZD must include:

• Your business name and GST number

• The date

• The sale item description

• The total sale amount and the GST portion (or a note that GST is included)

If a customer requests a tax invoice, you must provide 1 within 28 days for goods over 200 NZD. Automated tools like Stripe Invoicing can handle these details for you.

Some transactions fall outside the standard rate. Zero-rated sales, such as exports, are taxed at 0%, but you can still claim GST on your related costs. Exempt supplies, such as residential rent and financial services, have no GST in either direction.

Paying GST

Each GST period balances two figures:

• Output tax: GST you collect on sales

• Input tax: GST you’ve paid on business purchases

You pay the IRD the difference between the two figures. If you collected 6,000 NZD in GST and paid 4,500 NZD in GST on supplies in the current reporting period, your liability is 1,500 NZD. If you paid more than you collected, you would receive a refund.

Set aside the tax portion of each sale so you’re ready to remit it when filings are due. If you use a cash accounting basis, you record GST only when money changes hands. If you use the invoice basis, you record GST as you issue invoices. Keep every tax invoice, credit note, and receipt for at least seven years.

How do you file GST as a small business in New Zealand?

Small businesses can file GST every two months, which helps keep payment amounts manageable. Returns are typically due on the 28th of the month after the period ends. The deadlines for November and March are extended to January 15 and May 7 respectively. Missing a due date adds interest and penalties so consider linking your calendar to the IRD’s schedule or using automated reminders.

Everything happens in myIR, the IRD’s online portal. Once you log in, open your GST account, enter total sales and total purchases for the filing period and the system will calculate what’s payable or refundable. If you paid more GST on purchases than on collections, the IRD issues a refund, usually within 15 working days once your figures are confirmed.

How do small businesses claim GST on expenses?

A registered business can reclaim the tax on goods and services bought to run the business. These GST credits, often called input tax deductions, lower your overall tax liability.

What qualifies

You can claim GST on any purchase used for business purposes when:

• The supplier is registered for GST and has charged GST on the invoice

• The item or service is used for business activities rather than personal use

• You have a valid tax invoice for purchases over 50 NZD

If you purchase a laptop for 1,150 NZD, which includes 150 NZD in GST, you can claim that 150 NZD back in your next return.

For mixed-use expenses, such as a vehicle that’s used for both business and personal purposes, you can claim only the business portion. Expenses without GST, such as wages, bank fees, and overseas advertising, can’t generate tax credits because they don’t have GST.

Documentation and timing

Keep invoices that show the supplier’s GST number, the date, a description of goods or services, and the GST component. These records must be retained for seven years. You don’t send them to the IRD with your return, but you need to have them if the IRD reviews your claim.

On a cash accounting basis, you claim GST when payment is made. On an invoice basis, you claim it when the supplier’s invoice is received. The cash basis can help small businesses reconcile claims with real cash flow.

If GST paid on expenses exceeds GST collected on sales in a filing period, you’ll receive a refund. The IRD usually processes these within 15 working days, although large or unusual claims can trigger a review. Systems that record each purchase and its GST treatment, like accounting software integrated with Stripe, help businesses stay organized.

How Stripe Tax can help

Stripe Tax reduces the complexity of tax compliance so you can focus on growing your business. Stripe Tax helps you monitor your obligations and alerts you when you exceed a sales tax registration threshold based on your Stripe transactions. In addition, it automatically calculates and collects sales tax, VAT, and GST on both physical and digital goods and services—in all US states and in more than 100 countries.

Start collecting taxes globally by adding a single line of code to your existing integration, clicking a button in the Dashboard, or using our powerful application programming interface (API).

Stripe Tax can help you:

• Understand where to register and collect taxes: See where you need to collect taxes based on your Stripe transactions. After you register, switch on tax collection in a new state or country in seconds. You can start collecting taxes by adding one line of code to your existing Stripe integration or add tax collection with the click of a button in the Stripe Dashboard.

• Register to pay tax: Let Stripe manage your global tax registrations and benefit from a simplified process that prefills application details—saving you time and simplifying compliance with local regulations.

• Automatically collect tax: Stripe Tax calculates and collects the right amount of tax owed, no matter what or where you sell. It supports hundreds of products and services and is up-to-date on tax rules and rate changes.

• Simplify filing: Stripe Tax seamlessly integrates with filing partners, so your global filings are accurate and timely. Let our partners manage your filings so you can focus on growing your business.

Learn more about Stripe Tax, or get started today.