Quick Summary
You should consider cancelling your GST registration in New Zealand if your business no longer meets the criteria for mandatory registration (e.g., turnover falls below $60,000 and is expected to stay low), or if you cease your taxable activity. It's a significant decision, and you can find more information in Part 3 of the GST guide.
Details
Deciding to Cancel Your GST Registration
Cancelling your GST registration is a decision that requires careful thought, as it has implications for your business's compliance and financial management. You might consider deregistering for GST if:
- Turnover Falls Below Threshold: If your business's sales from taxable activities consistently fall below the $60,000 mandatory registration threshold, and you expect them to remain low, you are no longer legally required to be GST registered.
- Ceasing Taxable Activity: If you stop operating your business or no longer conduct any taxable activity.
- Voluntary Registration Mistake: If you initially registered for GST voluntarily (when your turnover was below $60,000) and later decide it was not beneficial for your business (e.g., administrative burden outweighs the benefits).
Key Considerations:
- Final GST Return: When you cancel your registration, you will need to file a final GST return and account for GST on any assets retained by the business.
- Lost Claiming Ability: You will no longer be able to charge GST on your sales or claim GST on your business expenses.
Refer to Part 3 of the GST guide for detailed information on the process and implications of cancelling your GST registration.
Source: GST guide (IR375)