If you have over $60,000 in sales (not profit) you are required to register for GST. If you do not go over $60,000 but want to register then you can register voluntarily. (You need to balance up the hassle of preparing GST returns with the amount you can claim on expenses).
What GST expenses can I claim?
If you are GST registered then most of the items you purchase in your business will have a GST component.
What does this mean?
When someone sells an item they are required to add GST to the price. If you purchase a paper at the dairy there is GST in the price.
How do I know?
If the purchase is under $50 you are not required to have a GST invoice, so for small items you can assume they include GST unless they fall into the category of items that don’t have GST.
If it is over $50 you need to have a docket that shows the sellers GST number and the amount of GST that you have paid.
What doesn’t have GST?
The main items that are excluded from the GST regime are:
- Interest payments or other financial transactions
- Bank charges
- Wages payments
- Domestic rent
For detailed information about GST please have a look at the IRD guide.