Goods and Services Tax

GST is a tax on the supply of goods and services in New Zealand by a registered person on any taxable activity they carry out. The rate for GST is 15% although it can be zero-rated for:

• Exports
• Certain financial services
• Sale or lease of residential properties
• Wages/Salaries and most Directors’ Fees

GST registration is required if the annual turnover of the business for a 12-month period is more than or likely to be more than $60,000.

GST returns may be filed monthly, two-monthly or six monthly. There are certain requirements for who must file monthly returns and who can file six monthly returns.

There are three methods of accounting for GST:

• Invoice Basis

• Payments Basis - not applicable if sales turnover is more than $2,000,000 per annum.
• Hybrid Basis

For more information call NUMBIZ Limited.

PAYE on Salaries and Wages

Pay As You Earn (PAYE) is the tax deducted from employees’ salary or wages. The amount of PAYE deducted depends on each employee’s tax code.

PAYE employees must complete a Tax code declaration (IR 330) as soon as they start working for you. If an employee fails to complete the tax code declaration, you must deduct PAYE at the no-declaration rate.

Employers are required to file an employer monthly schedule with IRD which details each employee’s gross earnings, PAYE, Withholding Tax, Student Loan, Kiwisaver and Child Support deductions.

For further information call us or refer to PAYE on the IRD website.

Schedular Payments

Independent Contractors employed under a “labour – hire arrangement” are now required to have withholding tax deducted from their earnings.  This came into effect from 01 April 2017.  Contractors will also need to complete an IR330C and use the tax code WT.  Contractors are still be able to deduct any work related expenses and have to pay their own ACC Levies.

 

 

GST Ratio Option

If you are registered for GST you may pay provisional tax at the same time as your GST payments if:

• You’ve been in business and GST registered for the last two tax years
• Your residual income tax for the previous year is greater than $2,500 and up to $150,000
• GST returns are filed monthly or two monthly
• Your business entity is not a partnership
• The IRD calculated GST Ratio is between 0% and 100%

For further information call NUMB1Z Limited.