Goods and Services Tax ( GST ) is a value added tax in New Zealand .
Taxable activities are the delivery of goods and services to others, carried out on a reimbursable basis. The following are not recognized as taxable activities: financial services, the supply of goods and services by non-profit organizations in the form of material assistance, rent from rental of residential real estate, and the supply of precious metals.
The tax is indirect , therefore, in the final analysis it is paid by the final consumers of goods and services, and the tax is included in the cost of goods and services.
Since October 1, 2010 the tax rate is 15%. However, for some transactions, the tax rate is 0%. In particular, the zero rate applies to operations for the export of goods, as well as certain types of services for the sale of existing enterprises, for the export of ships, aircraft, international transport of passengers and cargo to and from New Zealand, and others. At the same time, each transaction taxed at a zero rate should be reflected in the tax return.
Content
History
A tax on goods and services was introduced by the David Longa, on October 1, 1986, at a rate of 10% on most goods and services [1] . He replaced existing sales taxes for certain goods and services. The tax on goods and services has become part of the monetarist economic reforms initiated by the Labor Secretary of the Treasury, , later called “ ” [2] . Along with the introduction of a tax on goods and services, compensatory changes in income tax rates were made.
Since its inception, the tax rate on goods and services has doubled: July 1, 1989, it was set at 12.5%, and October 1, 2010, it again increased to 15%.
Tax Application
Tax on goods and services (GST) is paid on the difference between the amount received from the sale of taxable goods and services and the amount paid on their purchase (income minus expenses). Upon the onset of the tax period , a correlation of the corresponding amounts is made, and if the tax on goods and services collected from the sale is more than paid, the difference amount is paid. Otherwise, a tax refund is made.
The tax period for tax on goods and services may be: a month, two months, six months. New Zealand law allows the taxpayer to choose a tax period at his discretion for as long as he meets the requirements for the application of a particular period. By default, a two-month tax period is considered.
Companies engaged in the export of goods and services from New Zealand have the right to use the “zero rate” tax on their products. Theoretically, they may demand a refund of the tax paid on goods and services, but because Since consumers outside New Zealand do not pay tax, enterprises that sell tax-exempt goods and services cannot claim tax refund [1] .
Since enterprises have the right to demand reimbursement of the paid GST, as a rule, the GST included in selling prices does not have as much impact on purchasing decisions as other issues related to cash flow . Consequently, wholesalers often quote wholesale prices without GST, but they must collect the full selling price, including tax on goods and services, and report to the tax authorities ( Inland Revenue, IRD ).
In advertising and on price tags, the price should always be indicated taking into account tax on goods and services. An exception may be made only for wholesalers. Otherwise, specifying a price excluding tax on goods and services that is less than tax included is unlawful.
See also
- New Zealand Tax System
Notes
- ↑ 1 2 Goods and Services Tax Act 1985 . New Zealand Legislation. Date of treatment December 2, 2012. Archived January 16, 2013.
- ↑ New Zealand history online. Goods and Service Tax Act comes into force . Ministry for Culture and Heritage (August 30, 2012). Date of treatment October 4, 2012. Archived January 16, 2013.