If you carry on a taxable activity but are not required to register for GST, you have the option of voluntary registration.

The advantages of this include the following:

  • You are able to claim back GST that you have paid when buying goods or services from a registered person.
  • You maybe entitled to claim GST if you have bought second-hand goods from an unregistered person and you use these goods in your taxable activity.
  • Filing GST returns keeps your business records current and accurate.

There are, however, some disadvantages to voluntary registration. These include the following:

  • You are required to account to the IRD for GST on all your taxable supplies (this includes grants and subsidies).
  • Filing GST returns can be time-consuming.
  • You are not permitted to claim GST paid on expenses relating to exempt supplies.
  • Once you stop your registration you are required to pay GST on any business assets that you keep for private use.