The ADVANTAGES of choosing the RIGHT GST filing period

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When deciding what GST filing per

iod you will adopt, of which there are three, one-monthly, two-monthly and six-monthly to choose from.

 

Consider the following advantages and disadvantages.

  •    Two-Monthly – this is the standard taxable period.
    • Advantage – you pay six smaller amounts of GST over the course of a year. e.g. if the amount of GST to pay over a twelve month period was $57,500 then every two months you would pay $4,792.00 ($57,500 / 6). (Refer Note 1 below).
    • Disadvantage you must calculate and pay your GST every two months.
  •    One-Monthly – if your 12 monthly turnover is less than $24,000,000 you may want to file GST returns every month.
    • Advantage – ideal if you expect to receive regular GST refunds, e.g. as an exporter.
    • Disadvantage – you must calculate and pay your GST every month and is very compliance intensive.
  •    Six-Monthly – only small businesses may adopt a six-monthly return period.
    • Advantage – You are only required to file 2 x 6-monthy GST returns each year.
    • Disadvantage – you pay two larger amounts of GST over the course of a year. e.g. if the amount of GST to pay over a twelve month period was $57,500 then each six months you would pay $28,750.00 ($57,500 / 2). (Refer Note 1 below).

Note 1: In reality GST to pay, is not an equal amount payable each time as it depends on the Total Output Tax less the Total Input Tax for the period.

Read Inland Revenue’s article on choosing a taxable period.

Disclaimer: This publication has been carefully prepared, but it has been written in general terms only. The publication should not be relied upon to provide specific information without also obtaining appropriate professional advice after detailed examination of your particular situation.

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