Tax System in New Zealand: What is GST?
Help New Zealand be awesome by paying everyday tax on goods and services.
Established in 1986, the Goods and Services Tax is tax on almost anything you purchase. It is an inherent part of your trip here in New Zealand, whether you notice it or not. For instance, you may have to charge it to people if you work in a restaurant or a store, or you might have to add it to your purchases if it’s not already included in the price.
Here is a quick run down of what to expect from GST.
How much is GST?
Since October 2010, the GST rate is 15% applied to all good and services. Some rare services are exempt of GST and duty free will offer items tax free when landing in New Zealand from an international flight. More information on those 2 topics can be found below.
What is GST applied to?
Because GST is a tax on all goods and services, it will be applied to almost everything you purchase in New Zealand. The few notable exceptions are:
- Bank services, including interest
- Duty free items (see below)
- Your wage, which is subject to other taxes (see here).
How to calculate GST
The easiest way to calculate the GST is by the following:
Multiply a price by 3, then divide it by 23.
Example: Your grocery shopping this week is NZ$56…
56 x 3 = 168
1268 / 23 = 7.30
There is NZ$7.30 of GST in your NZ$56 grocery shopping. Wahoo!
Is it always included in the price?
Most of the time, businesses will include GST in the price displayed. However, some businesses will write a price and mention “+GST” which means that you should add the GST to that price to know how much the price is in total. This is pretty rare but still happens in some trade, wholesale retailers and services, so keep an eye out.
Shopping duty free
To save on GST when arriving in New Zealand, stop by the duty free shops at the airport. But keep in mind the following limitations on the amount you can purchase:
- 50 cigarettes or 50 grams of cigars.
- 3 bottles of spirits (under 1.125L each).
- 6 bottles of wine or other wine-like alcoholic drinks (4.5L maximum).
- Up to NZ$700 on other goods.
Note for the smokers:
The tobacco limits changed as of 1-November-2014 to drastically reduce the amount of tobacco coming in the country. Make sure to limit yourself at 50 cigarettes, as having 100 cigarettes, for example, 5 pack of 20, will cost you approximately NZ$112!
Can you get your GST back?
No you can’t. This is a question that we receive really often. GST is a tax that you cannot get back when leaving New Zealand. GST represents 18.5% of the income of Inland Revenue Departments, which helps the New Zealand government keep national parks green and pest free, keep water crystal clear, and maintain roads.
All in all, you did something good when paying GST in New Zealand.
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