GST Registration NZ

GST registration is one of those jobs that sits on the to-do list until it suddenly becomes urgent. A big contract lands, the invoices add up, and the question shifts from “should I register?” to “was I supposed to be registered already?”

The rules are not complicated. Inland Revenue sets a clear turnover threshold, a short list of situations where registration is compulsory, and an online process most people finish in one sitting. What catches businesses out is timing: crossing the threshold without noticing, or charging GST before the registration is in place. This guide covers who must register, who can register voluntarily, what to gather first, the process step by step, and the filing choices you make along the way.

GST registration at a glance

The short version

• You must register if you carry on a taxable activity and turnover was at least $60,000 in the last 12 months, or you expect it to reach at least $60,000 in the next 12.
• You must also register if you add GST to the prices you charge, whatever your turnover.
• Below the threshold, registration is voluntary for anyone carrying on a taxable activity.
• Registration is done online in myIR. Inland Revenue confirms your GST number and registration start date.
• Once registered, you charge GST at 15%, file returns, pay any GST you owe, and keep GST records.

Who must register for GST

Starting a business does not, on its own, mean you need to register. Plenty of sole traders and small companies trade for years without registering, quite legally. Registration becomes compulsory in two situations.

The first is the turnover test. If you carry on a taxable activity and your turnover was at least $60,000 over the last 12 months, you must register. The test also looks forward: if you expect turnover of at least $60,000 over the coming 12 months, you must register now rather than waiting until the money arrives. A signed contract or a strong pipeline can be enough to trigger it. The test runs on a rolling 12-month view, not the tax year or the calendar year.

The second trigger is simpler. If you add GST to the price of the goods or services you sell, you must be registered, whatever your turnover. Charging GST while unregistered is one of the problems Inland Revenue specifically asks people to contact them about, so if it has already happened, deal with it early.

Two definitions sit underneath these rules. A taxable activity is an activity carried on continuously or regularly that involves, or is intended to involve, supplying goods or services to another person for payment. A trade business, freelancing, consulting, selling online and short-stay accommodation all count. A one-off garage sale does not, and some supplies sit outside GST entirely, such as long-term residential rent, which is an exempt supply.

Turnover means the sales from your taxable activity, and sales through branches in different locations are combined for the test. Non-resident businesses supplying services or low value goods to New Zealand consumers follow their own registration rules, built around the same $60,000 threshold.

Who can register voluntarily, and whether it is worth it

Anyone carrying on a taxable activity can register voluntarily, even with turnover well under $60,000, and Inland Revenue does not ask you to justify it. The question is whether the benefits beat the paperwork in your situation.

Reasons people register early usually come down to claims and credibility:

• Claiming GST on costs. Registered businesses claim back the GST on purchases and expenses. For a business spending heavily on equipment, stock, vehicles or subcontractors, those claims add up quickly. Start-up costs are the classic example.
• Selling to other registered businesses. GST-registered customers claim back the GST you charge, so it costs them nothing. Some larger clients also treat registration as a credibility check.
• Smoothing the transition. If you expect to cross $60,000 within the year anyway, registering early avoids repricing and explaining a sudden 15% price change mid-stream.

The downsides are real. Customers who cannot claim GST back, mostly households, see a 15% price rise; absorb it instead and the margin takes the hit. Registration also means returns every filing period, even nil ones, plus proper records for everything you claim, and you cannot easily dip in and out later.

A contractor selling to registered companies often gains from registering early. A stallholder selling $30,000 a year of goods to the public usually does not.

Before you register: the checklist

The myIR application is much quicker with the following sorted first:

• An IRD number for the entity registering. Sole traders use their personal number; partnerships, trusts and companies need their own. For most, the GST number issued is the same as the IRD number.
• A myIR account for the business or organisation, if you do not already have one.
• Your business industry classification (BIC) code, a seven-character code describing what your business does. Inland Revenue uses it for industry grouping, and it also feeds into ACC levies, so choose the code that best matches your main activity. Codes can be looked up on the Business Industry Classification website.
• A bank account for refunds, recorded against your GST account so Inland Revenue can pay credits into it.
• Your start date and turnover picture: when the taxable activity started, and where turnover sits against the $60,000 test, looking backwards and forwards.
• Your filing frequency and accounting basis decisions. You choose both during registration, so read the section below before logging in.

Incorporating a company? The Companies Office lets you apply for the company’s IRD number and register for GST inside the online incorporation process, and the GST number arrives with the certificate of incorporation.

How to register for GST, step by step

1. Log in to myIR. Use the account for the entity that will be registered. Sole traders log in as themselves; companies and partnerships use the entity’s account.
2. Start the GST registration. Choose the option to register for GST and work through the application, confirming the entity details, the taxable activity, your BIC code and the date the activity started or will start.
3. Answer the turnover questions. The form tests both directions: turnover over the last 12 months, and what you expect over the next 12. These answers are what make the registration compulsory or voluntary, so be accurate.
4. Choose your filing frequency. Monthly, two-monthly or six-monthly, subject to the eligibility rules below.
5. Choose your accounting basis. Invoice, payments or hybrid, again subject to eligibility. Make no choice and Inland Revenue puts you on the invoice basis, with two-monthly filing matched to your balance date.
6. Submit and wait for confirmation. Inland Revenue sends a confirmation with your GST number and your registration start date. That date matters: it is when you must start charging GST, and the earliest point from which you can claim it.

One point on dates. Inland Revenue sets your start date in the confirmation, and backdating is available only in exceptional circumstances. If you applied late, that date can be set back to when your liability began, leaving GST payable on sales from then on, even though it was never collected from customers. Been adding GST to prices while unregistered? Contact Inland Revenue directly, and do it early.

Choosing a taxable period and accounting basis

Registration involves two choices that shape your GST admin for years. Both can be changed later in myIR if circumstances shift, but it is easier to start on the right settings.

Filing frequency (your taxable period)

Frequency	Who can use it
Monthly	Anyone. Compulsory if your sales are over $24 million in any 12-month period.
Two-monthly	Anyone with sales under $24 million in any 12-month period. This is the default if you do not choose.
Six-monthly	Anyone with sales under $500,000 in any 12-month period.

Monthly filing suits businesses that regularly receive refunds, such as exporters, because the money comes back faster. Two-monthly is where most small businesses land: frequent enough to keep on top of the numbers, infrequent enough to stay manageable. Six-monthly means only two returns a year, which sounds attractive until you are reconstructing six months of transactions in one sitting. Your filing frequency must align with your income tax balance date, 31 March for most businesses.

Accounting basis

Your accounting basis decides when GST counts: when money moves, or when invoices are issued.

• Payments basis. GST is accounted for when money actually moves: you return GST in the period customers pay you, and claim it in the period you pay suppliers. It is the friendliest option for cashflow, since you never owe GST on an unpaid invoice. Eligibility is capped: total sales of $2 million or less in the last 12 months, or likely to stay at $2 million or less in any 12-month period. Grow past $2 million and you must move off it.
• Invoice basis. GST is accounted for when invoices are issued: you return it when you invoice a customer, and claim it when a supplier invoices you, paid or not. Anyone can use it, and it is the default if you do not choose. The risk is timing: a slow payer can leave you funding GST on income not yet received.
• Hybrid basis. Invoice basis for sales, payments basis for expenses. Anyone can use it, although Inland Revenue notes it is uncommon among small businesses, because the cashflow cuts against you both ways: GST on sales can fall due before you are paid, while claims wait until you have paid.

Most new small businesses start on the payments basis with two-monthly filing. It is a sensible default rather than a rule, and a business with tight invoicing discipline and big upfront costs may prefer the invoice basis from day one. To test the numbers on your own invoices, our GST Calculator handles the adding and removing GST maths.

What happens after you register

Registration changes four things immediately, and Inland Revenue lists them plainly: you charge GST, you file returns, you pay what you owe, and you keep records.

Charging GST. From your start date, GST at 15% applies to your taxable supplies, and quotes and invoices need to reflect your status. The GST you collect is not your money: you hold it for the government until your return balances it against what you have paid out.

Claiming GST. You can claim GST on goods and services bought for your taxable activity, provided you hold the required taxable supply information (broadly, proper invoices and receipts). GST on private spending is not claimable, and mixed-use purchases need adjusting.

Filing returns. A return is due for every taxable period, including nil returns when you have not traded, and there are no extensions. Return and payment are due by the 28th of the month after the period ends, with two exceptions: the period ending 31 March is due by 7 May, and the period ending 30 November by 15 January. Each return totals the GST collected and the GST paid. Collected more, and you pay Inland Revenue the difference. Paid more, as often happens after a big equipment purchase, and you get a refund. Our Tax Rates NZ guide shows how GST sits alongside income tax over the year.

Keeping records. Keep invoices, receipts and GST workings for seven years. Good records are what stand between you and a declined claim if Inland Revenue asks questions later.

If your turnover drops below $60,000

Falling turnover does not automatically cancel your registration, and many businesses stay registered through a quiet patch because they expect trade to pick up. Cancelling is a choice in some situations and an obligation in others.

You must cancel within 21 days if you stop your taxable activity and do not intend to start a new one within the next 12 months. Cancelling does not close the business itself.

You might choose to cancel if your turnover for the next 12 months will be under $60,000, or you have been filing nil returns for more than 12 months. Cancellation is done in myIR.

You cannot cancel while GST is included in your prices, even if turnover has dropped under the threshold. Think through the consequences first: once cancelled, you can no longer charge GST on sales or claim it on expenses, which changes the real cost of everything you buy for the business.

Common mistakes

• Watching the wrong 12 months. The threshold is tested on any rolling 12-month period, backwards and forwards. Businesses that only check at balance date can cross the line months before they notice.
• Charging GST before registering. Adding “plus GST” to invoices triggers a registration requirement on its own, and creates a mess to unwind.
• Spending the GST. The 15% you collect feels like revenue sitting in the account. It is not. A separate account for GST and tax money is the oldest advice in small business, and still the most ignored.
• Missing returns because nothing happened. Nil returns are still compulsory. Late filing penalties apply per return: $50 on the payments basis, $250 on the invoice or hybrid basis, with late payment penalties and interest on unpaid amounts.
• Registering late and assuming the start date is today. Inland Revenue can set it back to when you became liable, leaving you to pay GST on past sales out of your own pocket.
• Choosing six-monthly filing for the wrong reason. Fewer returns means bigger returns. If your record keeping is shaky, shorter periods hurt less.

Frequently asked questions

Do I need to register for GST as soon as I start my business?
No. Starting a business does not trigger registration. You must register when turnover from a taxable activity reaches at least $60,000 in any 12-month period, when you expect it to reach that level in the next 12 months, or if you add GST to your prices.

Is the $60,000 threshold based on profit or sales?
Sales. It is your turnover, the total value of supplies from your taxable activity, not what is left after expenses. A business can be barely profitable and still well over the threshold.

Can I register for GST if I earn under $60,000?
Yes. Anyone carrying on a taxable activity can register voluntarily, and most GST numbers are simply the entity’s IRD number, confirmed by Inland Revenue along with your registration start date. Voluntary registrants take on the same obligations as compulsory ones, including filing every period and charging GST from the start date.

How often will I file GST returns?
You choose monthly, two-monthly or six-monthly filing when you register, subject to turnover limits. Six-monthly filing requires sales under $500,000 in any 12-month period, and sales over $24 million make monthly filing compulsory. Two-monthly is the default.

What happens if I register late?
Inland Revenue can set your registration start date back to when you became liable to register. GST is then payable on sales from that date, even if you never charged it, and late filing penalties, late payment penalties and interest can also apply. If you think you are in this position, contact Inland Revenue early: raising a problem yourself is always treated better than waiting to be found.

Can I cancel my GST registration if business slows down?
Usually, yes, if turnover for the next 12 months will be under $60,000 and GST is not included in your prices. If you stop your taxable activity altogether, with no plan to restart within 12 months, cancellation is compulsory within 21 days.

Sources

• Inland Revenue, Registering for GST
• Inland Revenue, GST guide IR375 (PDF)
• Inland Revenue, Which GST accounting basis and filing frequency should I use?
• Inland Revenue, Changing your GST filing frequency
• Inland Revenue, When to cancel your GST registration
• Inland Revenue, Filing and paying GST, and refunds
• Companies Office Companies Register, Tax registration
• Business.govt.nz, Guide to business tax
• More guides in this series: Finance, Tax & Money on BusinessKiwi

This article is general information about GST registration in New Zealand, based on Inland Revenue guidance at the time of writing. It is not tax advice for your situation. If your circumstances are unusual, or you are dealing with a late registration, talk to a tax adviser or contact Inland Revenue directly.