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Goods and services tax (GST) is a tax on most goods and services in New Zealand, at a rate of 15%.

As a business owner, you’re likely familiar with how this works. Your customers pay it when buying your goods and services and you collect GST on behalf of the government.

Your business is a ‘taxable activity’. The goods and services you supply to consumers are taxable and the government considers it reasonable for you to be able to claim back the GST you pay when you pay for goods and services.

However the IRD are now doing some checks on those that receive regular GST refunds. Especially for business’s that have annual turnover under $60,000. If you file regular GST refunds you may receive a letter from them asking for a description of the taxable activity of your business and an explanation for the refunds.

According to Inland Revenue the net GST refund amount paid out has increased from $463 million in 2001 to $1.473 billion in 2023. We think they’ll soon be doing more in depth reviews to ensure all these refunds are valid.

If you receive a letter asking for more information about your GST refund please contact us.