How New Zealand GST works
GST is a 15% broad-based tax on most goods and services sold or consumed in New Zealand, including imports. Registered businesses collect GST from customers, pay GST to suppliers, and remit the net amount to Inland Revenue.
Standard (15%)
Most goods and services sold by a GST-registered supplier: office supplies, professional services, software, restaurant meals, retail goods, commercial rent.
Zero-rated (0%)
Taxable at 0% with input tax credits still claimable. Exported goods, services performed outside New Zealand, sales of a going concern, and certain land and financial transactions.
Exempt
Not subject to GST and no input tax credit on related inputs. Most financial services, residential rent, residential accommodation under a head lease, donated goods and services, penalty interest, fine metals.
The standard NZ GST formulas
Add GST. Multiply the net by 1.15. $200 net becomes $230 gross.
Extract GST. Two equivalent shortcuts. Divide gross by 1.15 to get the net; the GST is the difference. Or, GST equals gross times 3 divided by 23. A $115 gross gives $15 GST.
Common scenarios
Sale to a GST-registered customer. Net of $1,000 at the standard rate, gross of $1,150. Customer pays the gross; supplier remits the $150 GST.
Capturing supplier receipts. A $46 GST-inclusive coffee-shop receipt contains $6 of GST (46 times 3 divided by 23) and $40 of net.
Zero-rated export. $5,000 sale to an overseas customer, zero-rated. GST charged is $0; the supplier can still recover GST on related input costs (packaging, freight).
Exempt residential rent. A monthly rent invoice of $2,000 carries no GST and the landlord cannot recover GST on repairs or agent fees.