NZ Company GST Registration: Threshold, Timing, and What New Directors Get Wrong

When does a new NZ company have to register for GST?

In New Zealand, GST registration becomes compulsory when your business's taxable turnover exceeds or is likely to exceed NZ$60,000 in any 12-month period. This threshold applies to your company from the moment it starts trading, not from the date of incorporation.

Practically, this means:

• If you sign a contract worth more than $60,000 before you have even issued an invoice, you are likely required to register for GST before the contract starts.
• If you project annual revenue above $60,000 in your business plan, register before you begin trading to avoid retrospective adjustments.
• If you are a sole trader converting to a company, your existing turnover history counts.

Can you register voluntarily below the threshold?

Yes. Voluntary registration is allowed for businesses below the $60,000 threshold, and it is often the right choice if:

• Your clients are GST-registered businesses (you can claim back input tax credits on your expenses).
• You expect to cross the threshold within 12 months.
• You have significant startup costs and want to claim GST back on those purchases immediately.

The downside of early registration is the compliance overhead: you must file GST returns every one, two, or six months depending on your turnover and the filing frequency you choose.

The most common mistakes new directors make

Mistake 1: Waiting until after the threshold is crossed

If your turnover crossed $60,000 three months ago and you only just registered, IRD will back-calculate the GST you should have collected and charge penalties and interest on the difference. Register before you cross the threshold, not after.

Mistake 2: Not tracking the rolling 12-month total

The $60,000 threshold applies to any 12-month period, not just the financial year. If your company had $50,000 in revenue in months one through ten, and you sign a $12,000 contract in month eleven, you crossed the threshold in month eleven. Track your running total every month.

Mistake 3: Mixing GST and income tax

GST is collected on behalf of IRD. It is not your money. Many new directors run into cash flow problems by spending the GST portion of their invoices before the return is due. Use a separate bank account or set aside the GST component of every invoice the day you issue it.

Mistake 4: Forgetting about zero-rated and exempt supplies

Some supplies are zero-rated (charged at 0% GST): exports, some financial services, and land sales. Some are exempt entirely: donated goods, certain financial services. If your company does both taxable and exempt work, you cannot claim input tax credits on expenses used for the exempt portion. An accountant can help you calculate the correct apportionment.

How to register for GST

Registration is done through myIR on the IRD website. You will need your company's IRD number (which you should have received when the company was incorporated) and your contact details. Processing typically takes two to five working days. Once registered, you receive a GST number and must include it on all your tax invoices.

GST return periods and what to choose

New companies with turnover under $500,000 typically choose six-monthly returns, which reduces compliance time. Businesses expecting frequent input tax refunds (e.g., those with high capital expenditure) often prefer monthly returns to get refunds faster. Turnover over $500,000 requires two-monthly filing by default.

When to talk to an accountant

GST registration is a relatively straightforward self-service process for most new companies. But there are situations where getting it wrong is expensive:

• You are unsure whether your supplies are taxable, zero-rated, or exempt.
• You have significant pre-registration expenses you want to claim.
• You are converting from a sole trader or partnership and have existing GST obligations.
• Your business involves both GST and non-GST supplies.

FreshFirms connects new NZ companies with local accounting professionals who specialise in first-year tax compliance. Find a local accountant to help you get your GST setup right from day one.