New Zealand Small Business Guide to GST

22nd January 2026
Stephen Ryan 

Disclaimer: This article is intended as a general guide in plain English. To keep things simple, some details have been generalised and technical points left out. It does not constitute tax or legal advice. Every business owner's situation is unique, so please consult your accountant before taking action. For tailored advice, specific to your needs, please contact us at info@stepaheadaccounting.co.nz.  

Introduction

Welcome to GST 101! This article is a crash course in the basics of GST for New Zealand Business and is a written form of the above video. Firstly we'll discuss registration options, then what you can claim and a few difficult but common scenarios that come up, a finally we'll talk about what documents you need.

Registering for GST

You need to register for GST when you think you’ll earn more than $60k turnover in a 12 month period, but you can choose to register earlier, which can be a great choice if you’ve got lots of start-up costs.

Filing Frequency

You can choose between filing a GST return every month, 2 months or 6 months. In most situations 2 months is best, because it means you’re not pressured with filing every single month, but equally, accounting for 6 months worth of trading can become a really big job.

Accounting Basis

There’s really only 2 different types of accounting bases you can pick. Nobody uses the hybrid method, because it takes the worst parts of the other two methods. So that leaves you with Payments or Invoice. 

Payment basis means that you account for GST based on the date that the money actually changes hands. While invoice basis, means you account for the GST based on the date of the invoice.

So, if you send an invoice on the 31st of March, and a customer pays it on the 1st of April, then under payments basis, the GST would be accounted for in the April/May GST return, while under invoice basis, the GST would be accounted for in the February/March GST return.

With invoice basis, there are often times when you pay or claim the GST before the underlying invoice is settled.

Most small businesses use payments basis because it aligns with the timing of the payment.

GST you can claim

Most of the time, it's easy - just claim back the GST you’re charged on goods and services you buy and use. But if you’re importing, buying from non-registered suppliers, have a private use component, or buying something with finance, then things can get a bit trickier.

If you’re importing, your supplier might charge GST, but probably won’t. Customs will probably charge you GST, and you can claim that back.

If you’re buying from non-registered suppliers, then they won’t charge GST, so there’s no GST to claim back. There is a carve out for second hand goods, so if you’re buying something for the business from Trade-me then you can claim GST on it. 

If you’re buying something that’s both business and private, and it’s over $10k, then you need to split your claim based on how much is business and how much is private use.

If it’s below $10k, then you can claim all the GST if the principal purpose is for the business. 

If you’ve bought something on finance, then you can claim the GST on the cost upfront. This can be quite tricky to do in your software because there won’t be a transaction to start off with, and there’s financing fees and interest which may be included in the price which you can’t claim the GST on. Here a journal is the best way to do this, but if you’ve never done an accounting journal before, then its best to get in touch with your accountant.

What sort of documentation do you need?

Documents for claiming GST

The paperwork requirements were slightly relaxed from the 1st of April 2023 to recognise how modern business is done. The new rules are more flexible than the old rules, so if you’ve got old invoicing practices then they’ll still comply with the new rules. 

In the bad old days, if inland revenue asked, you’d need to produce a physical document with a laundry list of specific criteria to support your claim. But now, things like invoices, bank statements, supplier agreements and contracts can be used as support for the GST you claim.

There’s also new thresholds to consider, $200, between $200 and $1,000 and over $1,000.

For $200 or less, your bank statement is sufficient evidence, meaning you don’t need to worry about keeping every receipt or invoice you get (though you might still need to keep documents for income tax, or other reasons).

When it’s over $200 you’ll need an invoice or receipt that shows the GST amount you’re claiming.

What do you need to put on your invoices?

From a purely GST perspective, if the amount is under $200, you don’t need to issue anything (though your customers might still want a receipt or invoice).

If the amount is between $200 and $1,000, then you need to have your name and IRD number, the date, a description of the goods and/or services, and the amount of GST.

If the amount is over $1k, you also need to add in the name and address of the recipient. Note that address is now very flexible, it could be an NZBN, website, email address, or phone number.

If you’ve got a GST question, contact us on info@stepaheadaccounting.co.nz or 027 759 8076.