Invoicing and Tax regulation in New Zealand
Invoicing Regulation in New Zealand
In New Zealand, invoicing is mandatory for both B2B and B2C transactions. According to the New Zealand Inland Revenue (NZIR) guidelines, all businesses must keep a record of every financial transaction they engage in. This means that every sales transaction, irrespective of the value, must be evidenced by an invoice. For tax purposes, invoices are used as proof of sales and costs.
Real-Time Reporting / Fiscalization in New Zealand
While real-time reporting or fiscalization isn’t mandatory for every business, it has increasingly become a norm for businesses in New Zealand. With technological innovation, many businesses now have the capacity to plan, control, and monitor their transactions in real time. However, there's no legal requirement for businesses to implement real-time reporting, it is largely principle-based and at the discretion of the business management.
E-Invoicing in New Zealand
E-invoicing is relatively new but is becoming more used and recognized in New Zealand. The New Zealand government is encouraging businesses to switch to e-invoicing as part of a joint initiative with the Australian government to create a single digital economy. While E-invoicing in New Zealand is not mandatory, it is being actively adopted by businesses due to its cost and time efficiencies.
VAT/GST/Tax Compliance in New Zealand
In New Zealand, Goods and Services Tax (GST) serves as a value-added tax. The tax rate for GST is currently set at 15%. Businesses are required to register for GST if their annual turnover exceeds NZD 60,000. Once registered, businesses must charge GST on their supplies, and can claim GST credits for the GST included in the price of their business purchases. Therefore, GST compliance is mandatory for eligible businesses. For B2G transactions, the government is also bound by these regulations and is required to pay GST on its purchases.
Please check the NZ Inland Revenue website for more specific tax rules and regulations.