Geekzone: technology news, blogs, forums
Guest
Welcome Guest.
You haven't logged in yet. If you don't have an account you can register now.




19 posts

Geek


#261961 25-Dec-2019 18:38
Send private message quote this post

Hi,

 

Does anyone here develop mobile apps that earn an income? I'm trying to figure out what my obligations are regarding GST. I'll try calling IRD after the holidays, but my past experience with them hasn't been great so I thought I'd ask for first-hand experience from developers.

 

I've just created my first android app and uploaded it to the Google Play Store. It has an in-app purchase. Google removes GST (or sales tax for non-NZ based buyers) and their 30% cut before paying me what's left. My sales are going to be significantly less than the $60K threshold, but the IRD website says if your goods include GST then you need to register. Does this apply for apps sold through an agent like Google who collects the GST themselves?

 

Any insight would be much appreciated. Thanks!


Create new topic
6106 posts

Uber Geek

Moderator
Trusted
Lifetime subscriber

  #2381257 25-Dec-2019 18:45
Send private message quote this post

IRD don't give tax advice. You'll need to talk to an accountant.

304 posts

Ultimate Geek

Subscriber

  #2381264 25-Dec-2019 19:33
Send private message quote this post

Not an accountant but has been in trade for about 10 years.

 

As you have mentioned if you make less than 60K it is optional.
Nice thing is you can claim GST back if the purchase is "business" related, downside is the paperwork.

 

Checked their website: https://www.ird.govt.nz/gst/registering-for-gst

 


 
 
 
 




19 posts

Geek


  #2381267 25-Dec-2019 19:39
Send private message quote this post

It's that second condition at the bottom that's throwing me:

 

"you carry out a taxable activity and you add GST to the price of goods or services you sell."

 

Google adds the GST automatically, I don't think I get a choice. So that sounds to me like I would need to register for GST even if I'm only earning a few bucks.




19 posts

Geek


  #2381269 25-Dec-2019 19:54
Send private message quote this post

Think I've found the answer. If anyone else is looking for the same info, check out this IRD page on online marketplaces:

 

https://www.ird.govt.nz/gst/gst-for-overseas-businesses/gst-on-low-value-imported-goods/who-needs-to-charge-gst/online-marketplaces

 

Looks like the marketplace (Google Play Store in this case) is responsible for the GST, and they state: 

 

"The merchant is not responsible for any GST payable on the sale."


3104 posts

Uber Geek

Lifetime subscriber

  #2386835 7-Jan-2020 15:43
Send private message quote this post

kiwichick12:

 

Think I've found the answer. If anyone else is looking for the same info, check out this IRD page on online marketplaces:

 

https://www.ird.govt.nz/gst/gst-for-overseas-businesses/gst-on-low-value-imported-goods/who-needs-to-charge-gst/online-marketplaces

 

Looks like the marketplace (Google Play Store in this case) is responsible for the GST, and they state: 

 

"The merchant is not responsible for any GST payable on the sale."

 

 

Makes sense... if *you* get the GST in your hand then you have to hand it over to IRD, and to do that you need to be registered. The benefit to you is you can then claim back the GST you spent in generating that GST. If you don't register, you can't claim back the GST you pay out.

 

Since you don't actually get the GST in your hand (Google does), you don't need to register (unless you make over $60K). But it may be worth your while registering anyway, since it will allow you to claim back (some proportion of?) the GST you spend on your Internet connection, computer, phone, etc.

 

Hopefully you already know that you will also have to pay income tax on the money you make from selling your app. But you will be able to claim back employment related expenses like Internet costs, computer and phone depreciation, home expenses, etc. NB that IRD expects you to make a profit and therefore to actually pay tax, not just claim refunds. They can (and will) retrospectively cancel your business and make you pay back all your refunds.

 

 




19 posts

Geek


  #2386842 7-Jan-2020 15:48
Send private message quote this post

Thanks for the detailed reply. Yes, I'm fully intending to pay tax on earnings. Income tax seems pretty straightforward, it was just the GST that I was initially unsure about. 


534 posts

Ultimate Geek


  #2386852 7-Jan-2020 16:05
Send private message quote this post

Just remember that 60k is turnover, meaning income+outgoings :) 


 
 
 
 


890 posts

Ultimate Geek


  #2386868 7-Jan-2020 16:47
One person supports this post
Send private message quote this post

snnet:

 

Just remember that 60k is turnover, meaning income+outgoings :) 

 

 

 

 

nope, turnover is just sales and $60k is income based


653 posts

Ultimate Geek


  #2386878 7-Jan-2020 17:14
2 people support this post
Send private message quote this post

gehenna: IRD don't give tax advice. You'll need to talk to an accountant.

 

Early candidate for the biggest piece of mis-information of the year. Will be hard to beat.

 

Of course you can absolutely contact IRD and ask if you need to register for GST according to the scenario you are enquiring about.

 

FYI IRD run GST workshops, for free, for those new to running a business. They also run, for free, workshops covering basic tax principles for self-employed and for employers. https://www.classic.ird.govt.nz/contact-us/seminars/free-tax-seminars-workshops.html 





BlinkyBill


534 posts

Ultimate Geek


  #2386904 7-Jan-2020 18:17
Send private message quote this post

sen8or:

 

snnet:

 

Just remember that 60k is turnover, meaning income+outgoings :) 

 

 

 

 

nope, turnover is just sales and $60k is income based

 

 

oops! for some reason I've always thought it meant that. My bad!


Create new topic



Twitter and LinkedIn »



Follow us to receive Twitter updates when new discussions are posted in our forums:



Follow us to receive Twitter updates when news items and blogs are posted in our frontpage:



Follow us to receive Twitter updates when tech item prices are listed in our price comparison site:





News »

Withings launches three new devices to help monitor heart health from home
Posted 13-Feb-2020 20:05


Auckland start-up Yourcar matches new car buyers with dealerships
Posted 13-Feb-2020 18:05


School gardens go high tech to teach kids the importance of technology
Posted 13-Feb-2020 11:10


Malwarebytes finds Mac threats outpace Windows for the first time
Posted 13-Feb-2020 08:01


Amazon launches Echo Show 8 in Australia and New Zealand
Posted 8-Feb-2020 20:36


Vodafone New Zealand starts two year partnership with LetsPlay.Live
Posted 28-Jan-2020 11:24


Ring launches indoor-only security camera
Posted 23-Jan-2020 17:26


New report findings will help schools implement the digital technologies curriculum content
Posted 23-Jan-2020 17:25


N4L to upgrade & support wireless internet inside schools
Posted 23-Jan-2020 17:22


Netflix releases 21 Studio Ghibli works
Posted 22-Jan-2020 11:42


Vodafone integrates eSIM into device and wearable roadmap
Posted 17-Jan-2020 09:45


Do you need this camera app? Group investigates privacy implications
Posted 16-Jan-2020 03:30


JBL launches headphones range designed for gaming
Posted 13-Jan-2020 09:59


Withings introduces ScanWatch wearable combining ECG and sleep apnea detection
Posted 9-Jan-2020 18:34


NZ Police releases public app
Posted 8-Jan-2020 11:43



Geekzone Live »

Try automatic live updates from Geekzone directly in your browser, without refreshing the page, with Geekzone Live now.


Support Geekzone »

Our community of supporters help make Geekzone possible. Click the button below to join them.

Support Geezone on PressPatron



Are you subscribed to our RSS feed? You can download the latest headlines and summaries from our stories directly to your computer or smartphone by using a feed reader.

Alternatively, you can receive a daily email with Geekzone updates.