VAT and Sales Tax in New Zealand

New Zealand's Goods and Services Tax is administered by Inland Revenue (IRD) under the Goods and Services Tax Act 1985. Introduced on 1 October 1986 at 10%, raised to 12.5% in 1989, and lifted to its current flat rate of 15% on 1 October 2010, GST replaced a fragmented Wholesale Sales Tax regime. Tax economists frequently cite the New Zealand GST as a benchmark: a single rate, an unusually broad base, and very few carve-outs compared with the multi-rate VAT regimes used across Europe or the patchwork sales-tax systems of the United States. The practical result is simplicity -- most businesses apply 15% to almost everything they sell and reclaim 15% on almost everything they buy for business purposes. Sellers add GST to the price, collect it from customers, and return the net amount to IRD after offsetting the GST they paid to their own suppliers.

For the New Zealand country context including income tax, see New Zealand country overview.

What is the GST rate and why does New Zealand have so few exemptions?

New Zealand charges GST at a flat 15% on taxable supplies of goods and services made in New Zealand by GST-registered persons in the course of a taxable activity. There is no reduced rate, no super-reduced rate, and no luxury rate. The single-rate, broad-base design was a deliberate policy choice at introduction: governments could set a lower income-tax rate precisely because the consumption tax captured a wide and predictable base. The principal exempt categories are financial services (for consumers), residential rent, and donated goods and services sold by non-profit bodies -- far fewer carve-outs than the 20-plus exemption categories typical in EU member-state VAT law. Inland Revenue's GST guide IR375 (March 2026 edition) confirms the current rate structure [IRD-GST].

What is the GST registration threshold?

GST registration is mandatory when annual turnover from taxable activities reaches NZD 60,000. The test looks both backwards and forwards: if taxable supplies in any rolling 12-month period have reached NZD 60,000, or if they are expected to reach that figure in the next 12 months, registration is required. Turnover from zero-rated supplies (for example, exports) counts toward the threshold; turnover from exempt supplies (for example, residential rent) does not. Businesses below NZD 60,000 may register voluntarily, which is often worthwhile for B2B suppliers whose customers can reclaim the GST as an input credit, and for exporters who need to recover GST paid on domestic inputs. Applications are lodged online through the IRD myIR portal [IRD-REGISTER].

What is the difference between zero-rated and exempt supplies?

The distinction matters because only the treatment of input GST differs. Zero-rated supplies attract 0% GST on the sale but the seller can still reclaim all GST paid on inputs used to make those supplies. Exempt supplies attract no GST on the sale and the seller cannot reclaim GST on related inputs at all. The practical consequence: an exporter (zero-rated) is in a regular GST refund position and recovers all input GST; a residential landlord (exempt) cannot recover any GST on maintenance, management fees, or furnishings for the rental property.

Zero-rated supplies confirmed by IRD include: exported goods (must leave New Zealand within 28 days of supply as a general rule); exported services (performed for non-residents not present in New Zealand); international passenger transport; the sale of a going concern (where buyer and seller are both GST-registered and record their agreement in writing); land sold between two GST-registered parties where the buyer intends taxable use and the land will not be the buyer's principal residence; newly refined fine metals (gold, silver, platinum at investment grade); and certain financial services supplied to GST-registered businesses that make 75% or more taxable supplies in any 12-month period [IRD-ZERO].

Exempt supplies confirmed by IRD include: financial services supplied to non-GST-registered persons (consumer banking, insurance, securities); residential rent; residential property sold as part of a long-term rental activity (rented for five or more years); penalty interest; fine metals at non-investment grade; and donated goods and services sold by charities [IRD-EXEMPT].

How do GST returns work -- 1-monthly, 2-monthly, or 6-monthly?

Two-monthly filing is the default for most GST-registered persons. Returns cover January-February, March-April, May-June, July-August, September-October, and November-December, with each return and payment due by the 28th of the month following the period end. Businesses with annual turnover above NZD 24 million are required to file monthly; monthly filing is also available by election for businesses in a regular refund position (exporters, capital-intensive businesses). Six-monthly filing is available -- but not mandatory -- for businesses with annual turnover below NZD 500,000. Returns and payment fall due simultaneously; late payment incurs Use of Money Interest at IRD's published rate plus shortfall penalties. Records must be retained for seven years [IRD-FREQ].

On the accounting basis side, registered persons with annual turnover at or below NZD 2 million may elect the payments basis (cash accounting -- GST reported when money is actually received or paid). The invoice basis is open to anyone regardless of turnover and is the default for larger businesses. A hybrid basis exists but is uncommon [IRD-FREQ].

What are the 2024 marketplace rules for app-based services?

From 1 April 2024, Inland Revenue extended GST collection responsibility to electronic marketplace operators facilitating three categories of listed services: ride-sharing, food and beverage delivery, and short-stay accommodation. Before this change, GST liability rested with the individual driver, courier, or host. Under the new rules, the platform (Uber, DoorDash, Airbnb, Bookabach, and their equivalents) must collect and remit GST at 15% on every transaction where the service is performed, provided, or received in New Zealand -- regardless of whether the underlying seller is themselves GST-registered [IRD-MKTPLACE].

For non-GST-registered sellers on these platforms, the rules include a flat-rate credit mechanism: the platform passes approximately 8.5% of the collected GST back to the seller to approximate the input-tax deductions a registered business would typically claim. The remaining 6.5% flows to Inland Revenue. GST-registered accommodation providers who exceed either NZD 500,000 in annual taxable supplies on a single platform or 2,000 nights listed annually on a single platform may opt out of the marketplace rules and handle GST directly [IRD-MKTPLACE].

Separate from the April 2024 changes, non-resident digital service providers (streaming, software, e-courses) have been required to collect and remit 15% GST on supplies to New Zealand consumers since 1 October 2016, and non-resident sellers of low-value goods (up to NZD 1,000 per consignment) have been subject to GST registration and collection since 1 December 2019, in both cases using the same NZD 60,000 threshold [PWCNZ].

For further guidance on New Zealand's broader tax obligations, see the New Zealand country overview. GST interacts with income-tax obligations for sole traders, landlords, and companies in ways that depend on the mix of taxable and exempt activities -- a qualified tax professional can assess the combined position for your circumstances.