Any Taxable activity i.e., purchase and sale of goods and services in New Zealand is liable for GST return. However, there are certain transactions that are exempted from GST returns in New Zealand. To understand how GST exemption works in New Zealand, it is crucial to know how GST is applied i.e., on which goods and services and how much GST is applied for any taxable activity.  New Zealand has categories for GST return and GST exemption based on these four categories: taxable supplies, Zero-rated supplies, Exempted Supplies, and Special supplies. To put it simply, a standard rate of 15% is applied to taxable supplies, Zero-rated supplies have 0% GST, Exempted supplies are exempted from GST and Special supplies have different rules regarding GST return.

GST Exemption

GST and Categories of Goods and Services:

Supplies are goods and services that are provided by a business. GST applies differently to different types of supplies meaning on different types of goods and services, GTS rules differ. As per the New Zealand rules, there are four types of supplies:

Taxable 15% GST
Zero Rated 0% GST
Exempted No GST
Special

GST Exemption on Taxable Supplies

As a registered GST business, you are required to pay GST on Taxable supplies. Taxable goods and services on which the standard 15% GST rate is applicable and this rate must be included in the sale of products.

Zero-rated GST Supplies

Zero-rated supplies are those goods and services on which there is a GST but the rate is 0%. One such example is when you sell goods and services to an overseas customer then the GST will be 0%. The same product or service sold to a New Zealand customer will have a standard GTS charge i.e., 15%.

On Zero rated sales and purchases, you can claim GST back from IRD.

GST is Zero-rated in the following cases:

  •  Exported sales
  • Sales of ongoing concerns i.e., business transactions while the business is being sold
  • Purchase and sale of land between two GST-registered individuals

Exempt Supplies

This category of goods and services is not included in GST and no fee is applied as such. These exempted supplies are listed by the New Zealand GST authorities as:

  • financial transactions like bank charges, mortgages, and loans. 
  • residential transactions like buying and selling of houses and renting are not liable for tax.
  • Donated goods and services sold by non-profit organizations
GST Exemption
Exempted Supplies are goods and Services that are exempted from GST return in New Zealand

On GST-exempted activities, no GST can be claimed in the case of Zero-rated GST supplies.

For those in New Zealand looking to calculate GST without the hassle of manual computations, there are several online tools available. With the Instant GST Calculator NZ, you can get your GST amount with just one click. The NZ GST Simplified tool ensures you don’t have to deal with manual math; simply enter your price and see the GST instantly.

Special Supplies

In certain situations, the GST will be applicable based on the terms and conditions of the goods and services being procured.

  • Lay-by,
  • second-hand purchases, and
  • hire purchases

will need different filing and claiming rules. Goods and services from an associated person i.e., close relatives like siblings, or spouses, may have a limited GST and fall under the Special supplies category.

Understanding Zero-Rated and Exempt Supplies for GST in New Zealand

As a GST-registered business understanding Zero-Rated and Exempt Supplies for GST in New Zealand is key to keeping records and filing GST without error.

Zero-rated SuppliesGST Exemption
1.      Goods and services donated via a Nonprofit organization: Donated goods and services sold by a Nonprofit are exempted from GST i.e., no GST return is required. 
2. Financial services: such as loans, mortgages, bank fees, currency exchange, etc. are exempted from GST returns in New Zealand.
3. Sale, Rent, and lease residential places: any place rented for a longer period for residential purposes is GST Exempted. GST cannot be included in rent, maintenance, or insurance. Likewise, selling such a dwelling for residential purposes is also exempted.  
4. Sale of gold, silver, and platinum (refined): the supply of fine metal is GST exempted if and when the fineness is less than 99%.
5.Penalty interest: interests or penalties on overdue accounts whether in business traction or other government-related fines are exempted from GST.		1. Goods and services donated via a Nonprofit organization: Donated goods and services sold by a Nonprofit are exempted from GST i.e., no GST return is required. 
2. Financial services: such as loans, mortgages, bank fees, currency exchange, etc. are exempted from GST returns in New Zealand.
3. Sale, Rent, and lease residential places: any place rented for a longer period for residential purposes is GST Exempted. GST cannot be included in rent, maintenance, or insurance. Likewise, selling such a dwelling for residential purposes is also exempted.  
4. Sale of gold, silver, and platinum (refined): the supply of fine metal is GST exempted if and when the fineness is less than 99%.
5. Penalty interest: interests or penalties on overdue accounts whether in business traction or other government-related fines are exempted from GST.

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