Invoicing in New Zealand when you’re not registered for GST

Many sole traders and new businesses in New Zealand aren't registered for GST. That's fine: you invoice your clients without GST until your sales reach the threshold.

What your invoice shows

• The title "Invoice", not "Tax Invoice".
• No GST number and no GST line: the total is your price.
• A note such as "No GST has been charged."

Everything else is the same as any invoice: your name and contact details, your client, the date, a description, the amount and how to pay.

When you must register

You must register for GST when your taxable supplies pass $60,000 in any 12 months, or you expect them to in the next 12 months. Zero-rated sales, like exports, count towards the threshold; exempt supplies, like residential rent, don't.

Signed-in Invoice Native businesses see their sales over the last 12 months against the threshold on the dashboard.

Registering voluntarily

You can register below $60,000. That lets you claim back GST on your business costs, but you then charge 15% GST on your sales and file GST returns.

After you register

Switch your registration on in Invoice Native and add your GST number. Your invoices become tax invoices with GST at 15%, and you'll file a GST return for each period.

An example invoice without GST

Aroha is a sole trader photographer who earned $38,000 last year. She isn't registered for GST. Her invoice to a client shows:

• "Invoice" at the top;
• her name, contact details and the invoice number and date;
• her client's name and address;
• "Wedding photography, 12 October — $2,400";
• a total of $2,400 and her bank account;
• "No GST has been charged."

There's no GST number, no GST line and no "Tax Invoice" — and nothing for the client to claim back. Make yours with the free New Zealand invoice generator: leave GST registration set to "Not registered for GST".

Working out whether you're near the threshold

Add up your taxable supplies — what you've charged for goods and services in New Zealand, plus zero-rated sales such as exports — for the last 12 months. Leave out exempt supplies, the sale of capital assets and amounts you receive for ending your business. If the total is over $60,000, or you expect the next 12 months to be, you must register.

The test is rolling: check it every month, not just at the end of the tax year. A big contract can take you over the threshold in a single month.

Registering for GST

Register online in myIR. Your GST number is normally your IRD number. You choose:

• a filing frequency: two-monthly by default, six-monthly if your sales are $500,000 or less a year, or monthly;
• an accounting basis: the payments basis (if your sales are $2 million or less a year) or the invoice basis.

Once registered, change your settings in Invoice Native. Your new invoices become tax invoices with 15% GST, and the GST101A summary is ready for each period.

Invoices you sent before registering

Invoices issued before your registration date stay as they are: they had no GST, and you don't add it afterwards. GST applies to supplies from the date your registration starts. If you've agreed a contract that runs across the change, talk to your client about whether your prices include GST from that date.

Prices for consumers

If you sell to the public, remember that once you're registered, prices you advertise to consumers normally have to include GST. Before registering, your prices simply don't have any GST in them.

Deregistering

If your sales fall below the threshold, you can ask Inland Revenue to cancel your GST registration, as long as you don't expect them to go back over $60,000 in the next 12 months. When your registration ends you may have to account for GST on the business assets you still hold. After that, invoice without GST again: switch your registration back to "Not registered for GST" in Invoice Native, and your invoices go back to plain invoices with no GST.

Common mistakes

• Adding GST before you're registered — your client can't claim it, and you'd owe it to Inland Revenue anyway.
• Calling the document a "Tax Invoice" when you're not registered.
• Putting your IRD number on it as if it were a GST number.
• Forgetting to count zero-rated sales, such as exports, towards the threshold.