Invoice as a private person

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tcpdump

311 posts

Ultimate Geek
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#77933 24-Feb-2011 16:23

Hi,

I'm doing some remote work for a company in Australia and they agreed to make the payment in my australian bank account (I have a savings account over there).

Anyway, they requested an invoice so they can make the payment.

My question is, how can I issue an invoice as a private person?

Another question would be related to the way I declare my income. Since they will pay in AUD and my bank account is in AUD, what value to I declare do IRD in order to pay the tax on that amount?

Many thanks.

mattwnz

20515 posts

Uber Geek
+1 received by user: 4795

#443106 24-Feb-2011 16:36

tcpdump: Hi,

I'm doing some remote work for a company in Australia and they agreed to make the payment in my australian bank account (I have a savings account over there).

Anyway, they requested an invoice so they can make the payment.

My question is, how can I issue an invoice as a private person?

Another question would be related to the way I declare my income. Since they will pay in AUD and my bank account is in AUD, what value to I declare do IRD in order to pay the tax on that amount?

Many thanks.

The ird website will tell you what to do and they have sample invoices.

Zeon

3926 posts

Uber Geek
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#443111 24-Feb-2011 16:37

Just make an invoice with your own name as the supplier name. in regards to tax, its probably best just to declare it as untaxed overseas earnings for the IRD so you pay normal tax on it in NZ (we have a tax treaty with Aussie which i think should cover this).

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dclegg

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#443122 24-Feb-2011 17:12

While my situation is a little different to yours, in that I get my invoices paid directly into my NZ bank account, my income consists of remote work for a couple ofUS companies. I'd strongly recommend you go see an accountant, as they will be able to advise the best way to maximise your income and minimize your tax obligations. For instance, my accountant suggested that I set up a company, and all my invoicing is done through this company.

In fact, my accountant takes care of my yearly tax return, and 6 monthly GST returns (a requirement if you're GST registered, which you may be recommended to do). For the financial piece of mind it gives me, I find it a worthwhile business expense. Of course YMMV, especially if this remote work is not going to be a long-standing thing, but I'd still suggest seeing an accountant at the very least for a one-off consultation.

As for the invoice format, I use an invoicing application I wrote for myself. It allows me to enter in my daily hours, and will generate an invoice in PDF format and attach it to an email at the touch of a button. Heres a sample :-

tcpdump

311 posts

Ultimate Geek
+1 received by user: 3

#443131 24-Feb-2011 17:43

Hi,

I gave IRD a call as I had some extra questions.

It seems that receiving money in my australian account is not a problem.
I can issue an invoice and I can specify the AUD payable and the converted value in NZD for tax purposes.
This link has the currency converter: http://www.ird.govt.nz/how-to/overseas-currency/

I'm still having issues believing how easy and straight forward everything is in New Zealand.

Thanks all for your answers.

alasta

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#443158 24-Feb-2011 19:21

If you are GST registered, or obligated to become GST registered, then you need to be careful around whether to charge GST or not. With your client being overseas their liability for NZ GST depends upon whether the goods and services that you are providing are deemed to have been consumed in NZ or exported. In some cases determining this can become very complex.

As suggested above you really should consult a tax advisor if in doubt.

mattRSK

822 posts

Ultimate Geek
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#443163 24-Feb-2011 20:09

If you are going to be doing a lot of that sort of thing I would register a company, if not it's not really worth it as the tax rate is higher than personal income tax. (dependant on which tax bracket you fit into).

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tcpdump

311 posts

Ultimate Geek
+1 received by user: 3

#443175 24-Feb-2011 20:55

Here comes the funny part. I do have a company registered but for some reason I thought it would be easier to invoice as a private person.

I will make the invoice on behalf of my company as that's the easiest way.
The company is paying less than my tax rate (as I'm on the high one) but if I'll want to use the money for my personal needs I'll have to pay the difference anyway so from a tax point it's the same thing.

Cheers.