Claiming GST on IT Equipment Purchases (NZ)

Understanding GST in New Zealand

GST is a 15% tax added to most goods and services supplied in New Zealand. Businesses registered for GST can generally claim back the GST paid on their business expenses. This is known as claiming an input tax credit. For IT equipment and services, this means that if your business is GST-registered, you can typically recover the 15% GST component of your purchase price.

Who Can Claim GST?

Only businesses registered for GST with Inland Revenue (IRD) can claim GST on purchases. To be eligible for GST registration, your business must have a turnover of more than NZD $60,000 in a 12-month period, or expect to exceed this threshold. If you are voluntarily registered below this threshold, you can also claim GST. The primary condition is that the IT equipment or service must be used for making taxable supplies.

Key Requirements for Claiming Input Tax

To successfully claim GST on IT purchases, businesses must meet specific requirements:

• GST Registration: Your business must be registered for GST.
• Taxable Activity: The IT equipment or service must be used for your taxable activity.
• Tax Invoice: You must hold a valid tax invoice for purchases over NZD $50. For purchases under NZD $50, a receipt is usually sufficient.
• GST Period: The claim must be made in the correct GST return period.

A valid tax invoice typically includes the supplier's name and GST number, your name or trade name, a description of the goods or services, the date of supply, and the total amount including GST, or the amount of GST charged.

Common IT Purchases and GST

GST can generally be claimed on a wide range of IT-related business expenses, including:

• Computers, laptops, servers, and networking hardware
• Software licences and subscriptions
• IT support and maintenance services
• Cloud computing services
• Peripherals like printers, monitors, and keyboards
• Telecommunications equipment used for business

It is important to differentiate between business and private use. If IT equipment is used for both business and private purposes, you can only claim the GST portion attributable to the business use. This often requires apportionment.

Capital Assets and Depreciation

When IT equipment is purchased as a capital asset (e.g., a server or a fleet of laptops), the GST component is claimed in the same way as other business expenses. The depreciation of the asset for tax purposes is a separate consideration and does not directly impact the initial GST claim. However, the asset's cost, excluding GST, forms the basis for depreciation calculations.

Disclaimer

This information is intended as a general guide only and does not constitute financial or tax advice. GST rules can be complex and may change. For advice specific to your business situation, always consult your accountant, tax advisor, or Inland Revenue (IRD).