In New Zealand, specific goods and services are GST-exempt under local tax laws, meaning they are either excluded from or not subject to GST charges. Knowing which items fall under these GST exemptions is essential for businesses, as it can prevent unnecessary payments, improve cash flow, and ensure tax compliance. Below is a detailed list of commonly overlooked GST-exempt items in New Zealand.
1. Financial Services: Financial services such as interest, dividends, loans, and fees for financial advice are GST-exempt. However, be aware that certain administrative fees may still include GST.
2. Residential Rent: Residential rent is exempt from GST, so landlords cannot charge or claim GST on costs related to residential properties. (Note: Commercial property rentals are GST-taxable.)
3. Sales of Residential Properties: Residential property sales are typically exempt, except in cases where developers are selling new builds, which are subject to GST.
4. Donated Goods (Non-Profits): Non-profits selling goods or services derived from donations—such as items in charity shops—are exempt from GST.
5. Wages and Salaries: Employee wages and salaries do not attract GST, as they are covered under PAYE tax instead.
6. Precious Metals: Pure gold, silver, and platinum are exempt from GST, though GST still applies to jewelry and other items containing these metals.
7. Exports: Goods and services exported to overseas clients are zero-rated (0% GST), allowing businesses to claim GST on related expenses while charging clients nothing.
8. Education Services: Registered education providers offering certified training and tertiary education are GST-exempt.
9. Healthcare Services: Services provided by registered healthcare professionals are generally exempt, although some products like supplements remain taxable.
10. Childcare Services: Childcare and early education services are not subject to GST.
11. Donations: Donations made to registered charities, including cultural donations (koha), are GST-exempt if they are not connected to specific goods or services.
12. Life Insurance Premiums: Life insurance premiums are exempt, unlike general insurance products (e.g., car or health insurance).
13. Certain Government Levies: Some government levies, like vehicle registration fees, are GST-exempt. However, other levies, such as ACC, include GST.
14. International Passenger Transport: GST is zero-rated for inbound and outbound international travel, exempting these fares from GST.
15. Religious Services: Religious ceremonies and community services provided by registered religious organisations are GST-exempt.
Being well-versed in these GST exemptions can help businesses in New Zealand manage GST obligations effectively, minimise overpayment, and achieve greater tax efficiency.
The content in this blog is intended to provide general insights and should not be regarded as professional advice. Each business situation is unique, and we recommend consulting with a professional for specific guidance. At Black Arrow Business Studio, we specialise in accounting and consulting services designed to support your business’s growth and success. Feel free to contact us for expert advice and customised solutions.
Are you struggling with accounting and business management for your business? We are here to help! Get in touch with us to discuss how our expert services can support your business’s success. Contact us today to schedule a free consultation and see how we can add value to your operations. Please find us on Facebook | Linkedin | Instagram – Follow us and give us a like to see more updates and news.