Registration for goods and services tax is one aspect of taxation that can be made faster with the help of tax agents. GST does not apply to all individuals engaged in business. However, it still requires adequate knowledge for an accurate preparation of business tax returns.
What is GST?
Goods and services tax is the tax applied to taxable goods and services, including imported goods and certain kinds of imported services. A 15% charge applies to all taxable goods and services in New Zealand.
Taxable goods and services refer to a part of business activity carried out to supply or receive taxable supplies in exchange of money, compensation or reward. It does not include goods and services not listed for GST as well as exempt supplies, such as renting a house for private use; interest received and donated goods and services sold by a non-profit organisation.
When should you register for GST?
Only individuals that carry out a taxable activity with a turnover of more than $60,000 for the last 12 months can register for GST. Also, businesses that expect to have a similar turnover amount in the next 12 months must register.
How about those that includes GST in their prices but has the turnover that is less than $60,000? These are still required to register and include GST in their tax returns.
Voluntary goods and services tax registration is also allowed for businesses with less than $60,000 turnovers and is engaged in taxable activities.
What is a taxable activity?
It is an activity that businesses, professionals, organizations, clubs and associations carry out on a continuous or regular basis. It includes supplying and receiving goods and services to another person for a consideration.
This makes businesses that are selling plant assets but are discontinuing any taxable activity, substantially reducing the taxable activity, and replacing plant assets exempted from registering for GST.
These are only the basics of GST. There are exceptions and special rules, not to mention the need to know other business-related tax information. For an efficient business tax preparations, let a professional tax agent guide you through.