Invoicing question

Discussion in 'NZ Computing' started by Vista, Sep 12, 2006.

  1. Vista

    Vista Guest

    I have done some computer programming work for a company in the USA
    Just wondering, should I invoice them in NZ dollars or US dollars or does it
    make any difference? Also do I need to charge them GST. I am GST registered,
    but I believe GST is zero rated for this, as the work is for an overseas
    company to use on their overseas website.
    Cheers for any advice
    Vista, Sep 12, 2006
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  2. Vista

    Allistar Guest

    I would charge them in the currency they are accustomed to paying in - USD.
    That's not a legal requirement though, you could bill them in Yen if it
    takes your fancy.

    You don't add NZ GST - it is a zero rated supply. I am not familiar with any
    additional rules from a US point of view.

    Keep in mind that if you are a qualifying company, you can only invoice
    $10,000 to foreign companies.

    Allistar (who regularly invoices Australian companies in a similar manner).
    Allistar, Sep 12, 2006
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  3. Vista

    whome Guest

    Maybe it is a good idea to setup a foreign currency account too, then, you
    have more flexibility of when you convert the money to NZD.

    What do you mean qualifying companies can only invoice 10k to foreign
    whome, Sep 12, 2006
  4. Vista

    peterwn Guest

    It all depends what the parties agreed to. If the contract was
    expressed in NZD, then primary invoicing should be in NZD and the
    client should pay in NZD (when setting your prices remember that your
    NZ bank probably charges an 'inbound' fee for telegraphic transactions
    and perhaps drafts).

    You can give the client the option of paying in USD which you can
    either lodge in the USA or you can bank the USD cheque in NZ. You
    cannot avoid NZ income tax by billing in USD or setting up the contract
    subject to USA law.
    peterwn, Sep 12, 2006
  5. Vista

    Allistar Guest

    If your company is a "qualifying company", one of the restrictions is you
    cannot invoice more than $10K to foreign companies in one financial year. I
    used to have the IRD PDF that explains the rules with qualifying companies,
    but can't find it. A search on their website would find it. A big benefit
    of qualifying companies is that when dispersing money from the company to
    directors, the director doesn't need to mention it on their personal
    returns. In essense you don't have to pay the top 6% tax on this (if over
    the 39% threshold).

    Allistar, Sep 12, 2006
  6. Vista

    whome Guest

    Cheers , I'm ok then :)

    100% of my income is from overseas so I guess this is why the accountant
    never recommended such a structure.

    I wonder why they have this 10k rule? The tax code is ridiculously complex.
    whome, Sep 12, 2006
  7. Vista

    Allistar Guest

    Indeed it is.

    Allistar, Sep 13, 2006
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