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GST on software payments

September 15, 2023

Most of us are now making monthly payments for the use of software. How do you know if you can claim GST on these payments?

Facebook, Adobe and other overseas suppliers are required to register for GST and pay it on the “remote” services they supply to us. To save them compliance costs, they don’t need to worry about charging GST when the purchaser is GST registered. Instead, they can ask you to supply your GST number to show you are registered for GST. If the overseas supplier doesn’t get a GST registration number it charges GST.

So, if you buy an Adobe subscription and you have supplied your GST number to the company, the payment you make doesn’t include GST. You should not be claiming GST on it. If a GST registered business doesn’t advise it is GST registered, and is therefore charged GST, that can be claimed back if the price of the goods is less than $1000. Over that figure, it has to apply for a refund from the overseas supplier.

LinkedIn and Google have a base in New Zealand and therefore charge GST, so it can be claimed back it the normal way even if it is over $1,000.

How do you know when to claim GST? Look on the invoice. If GST is not mentioned, there’s
no claim.

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