New Zealand has a separate tax that is applied to the supply of goods and services by registered taxpayers. If a business activity has a turnover that is less than $60,000 per annum, there is generally no requirement to register (although registration can be made voluntarily with a lesser annual turnover).
In principle, GST is a tax that falls finally on the end consumer who purchases goods and services as part of their consumption activities. GST registered taxpayers "merely" act as intermediaries who charge and pay GST which is offset in GST returns filed with IRD. Businesses therefore are not the end payer of GST, only consumers are. However, they carry a significant responsibility in this intermediary role to ensure that GST is collected and claimed in the correct manner, and payments are made to IRD on time.
The rate of GST was (up to 30 September 2010) 12.5% although the supply of goods and services can in some cases be treated as zero rated, including exported goods and services and the sale of going concern activities), while other supplies are exempt (residential property rentals and the provision of financial services). The rate of GST was increased to 15% from 1 October 2010.
New Zealand enjoys a relatively pure system of GST with few exemptions, which makes accounting for GST transactions a much simpler task than is the case in other countries where a wide range of exemptions apply.
GST returns are filed for either one month, two month or six month periods applying either a cash or accrual accounting basis. The method used is partly elective and partly based on the level of turnover achieved by the taxpayer.