Introduction
If you’re starting a business in New Zealand, it’s important to understand the mandatory tax registrations that apply to your business. Here’s what you need to know about tax registrations in New Zealand.
Goods and Services Tax (GST)
Goods and Services Tax (GST) is a tax on most goods and services sold in New Zealand. If your business has a turnover of NZD $60,000 or more in a 12-month period, you are required to register for GST. You can also register voluntarily if your turnover is less than NZD $60,000.
To register for GST, you will need to apply to Inland Revenue, which can be done online or by paper application. Once you’re registered, you’ll need to add GST to your sales and claim GST back on your purchases.
Employer Registrations
If you have employees in your business, you’ll need to register as an employer with Inland Revenue. This registration applies whether you’re paying your employees wages or salaries, or if you’re paying them as contractors.
When you register as an employer, Inland Revenue will provide you with a PAYE (Pay As You Earn) number, which you’ll need to use to deduct PAYE from your employees’ wages or salaries. You’ll also need to file regular PAYE returns with Inland Revenue.
Provisional Tax
If your business expects to earn a profit of NZD $5,000 or more in a tax year, you will need to pay provisional tax. Provisional tax is a way of paying your income tax in advance, based on an estimate of your income for the year.
To register for provisional tax, you can do so online through Inland Revenue. Once you’re registered, you’ll need to make regular payments throughout the year.
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Other Registrations
Depending on the nature of your business, you may also need to register for other taxes. For example, if you sell alcohol, you’ll need to register for excise tax. If you’re a non-resident doing business in New Zealand, you may need to register for non-resident withholding tax.
It’s important to note that failure to register for the necessary tax registrations can result in penalties and interest charges from Inland Revenue.
Summary
In conclusion, mandatory tax registrations in New Zealand include GST, employer registration, and provisional tax. Depending on your business, you may also need to register for other taxes. Make sure to stay compliant with tax regulations to avoid penalties and interest charges.
This article does not constitute legal advice.
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