How does GST work for New Zealand sole traders?

GST (Goods and Services Tax) is a 15% tax charged on most goods and services supplied in New Zealand. As a GST-registered sole trader, you act as a collector of GST on behalf of Inland Revenue. Here's how it works: 1. You charge 15% GST on your invoices to clients (e.g., NZ$1,000 service + NZ$150 GST = NZ$1,150 total) 2. You can claim back GST paid on business expenses (e.g., NZ$115 spent including NZ$15 GST) 3. You pay the difference to Inland Revenue (output tax minus input tax) If your GST on sales is greater than GST on purchases, you pay the difference to IR. If it's less (e.g., you had major expenses), IR refunds the difference to you. GST-registered businesses must keep tax invoices for all purchases of NZ$50 or more that they want to claim GST back on.

• 15% GST charged on taxable supplies
• Claim back GST on business purchases (input tax credits)
• Pay the difference between GST collected and GST paid
• Keep tax invoices for purchases of NZ$50+
• Refund available if input tax exceeds output tax