Acquiring a company VAT number in New Zealand entails registering for domestic GST. With it’s close proximity to Australia and South East Asia, New Zealand is fast becoming a favourable destination for international business. Voted as one of the easiest countries to do business in or start a business according to World Bank’s 2016 Doing Business survey, understanding how to apply for a New Zealand tax/vat number is crucial. For Foreign businesses, it could mean saving 15% on all your goods and service costs incurred in New Zealand.
Identifying Why You Need to Register for Tax in New Zealand
Firstly, you’ll need to understand why you need or want to register for GST in New Zealand and get that company VAT number. To do this, you need to understand whether you are registering as a resident or non-resident business. The two categories can be defined as followed:
Resident Tax Registration
You’ll have to apply for your New Zealand company VAT number by completing the resident tax registration process if your business:
- Establishes a permanent residence in New Zealand. i.e you open an office there.
- Are making taxable sales in New Zealand.
Non-Resident Tax Registration
A non-resident tax registration is considered purely voluntary and is mainly done so that your foreign business can take advantage of GST refunds. In this case, you would simply be using your New Zealand company VAT number to claim tax refunds. It’s worth noting, that you should still seek advice from specialists to evaluate if your business has any output risks prior to registration.
Registering for Tax in New Zealand if you’re a Digital Services Business
If you provide B2C digital services to New Zealand customers, you will be required by law to register for GST. New Zealand defines digital services as those that are transmitted by a non-resident to a resident by means of wire, cable, radio, optical or other electromagnetic system or by means of a similar technical system. Digital products are treated as “services” and commonly referred to as “remote services”. A remote service is where there is no connection between the physical location of the customer and the place where the services are performed. Examples include:
- Supplies to digital content such as e-books, movies, TV shows, music and online newspaper subscriptions;
- Online supplies of games, apps, software and software maintenance;
- Webinars or distance learning courses;
- Insurance services;
- Gambling services;
- Website design or publishing services; and
- Legal, accounting or consultancy services.
What is the Tax Registration Process in New Zealand?
The tax registration process in New Zealand differs slightly if you require a resident registration or non-resident registration. Both will result in the company acquiring a VAT number in New Zealand.
Resident Registration process in New Zealand
You must register for GST if you carry out a taxable activity and your turnover was $60,000 or more in the last 12 months (or will be $60,000 or more in the next 12 months), or if GST is included in your prices. You can only charge GST on your sales and income and claim it back on purchases and expenses if you’re GST registered. According to New Zealand’s Inland Revenue website, the registration process is as follows:
- Check if you need to register for GST
- Get an IRD number (if you don’t already have one)
- Choose how you want to claim and return GST
- Decide how often you need to file your GST returns
- Find your business description and code
- Register for GST with myIR Secure Online Services
- Find out what you need to do now that you’re registered
Sales greater than NZD $60,000 in the last 12 months or are expected to be more that NZD $60,000 in the next 12 months.
Filing frequency/deadline: Quarterly. Filing deadlines are as follows:
- 7 May, for quarter ending 30 March
- 28 July, for quarter ending 30 June
- 28 October, for quarter ending 30 September
- 28 January, for quarter ending 31 December
Alternatively, you can outsource the process to specialists who will take on the administrative burden on behalf of your business and ensure that you remain 100% compliant. Vatglobal can offer you assistance in both registration and filing within New Zealand.
Non-Resident Registration Process in New Zealand
According to New Zealand’s Inland Revenue’s website, to register and become a non-resident GST business claimant you need to:
- Complete registration application for a non-resident GST business (IR564) form.
- Include copies of the supporting documents referred to in the IR564 form.
- It’s important to note that while you’re registered with New Zealand, you must file a GST return for each taxable period. If you haven’t had any payments in a period, you must file a “nil” return.
VAT IT provides businesses with assistance with non-resident registrations and will take over the entire process from start to finish on your behalf. VAT IT will also claim your GST refunds on your behalf.
Registering for tax and getting a company VAT number in New Zealand does not have to be a complicated journey. There are specialists who can assist you with both processes. We have been helping businesses with non-resident and resident registrations for over 20 years and would be happy to help.