Quick Summary
Zero-rated supplies in New Zealand are goods or services where GST is charged at 0%. Unlike exempt supplies, businesses making zero-rated supplies can still claim GST on their associated expenses. Common examples include exports of goods and certain services provided to non-residents.
Details
Understanding Zero-Rated Supplies
'Zero-rated supplies' are a distinct category within New Zealand's GST system, meaning that while GST applies, the rate is 0%. This differs significantly from exempt supplies.
- 0% GST Charged: You still account for GST, but the amount you charge your customer is zero.
- GST Claimable on Expenses: The key advantage of zero-rated supplies (compared to exempt supplies) is that businesses can still claim the GST paid on purchases and expenses incurred to make those zero-rated supplies.
- Common Examples of Zero-Rated Supplies:
- Exports of goods: When goods are physically exported from New Zealand.
- Services to non-residents: Certain services provided to customers who are outside New Zealand.
- Sales of a going concern: The sale of an entire GST-registered business as a going concern, under specific conditions.
- Sales of land to a registered person: Specific types of land sales between GST-registered entities.
- Purpose: Zero-rating typically applies to ensure that goods and services consumed outside New Zealand are not subject to NZ GST, making them more competitive internationally.
Source: GST guide (IR375)