Invoicing question

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

 

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).

 

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
companies?

 

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.

 

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.

 

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.

 

Indeed it is.

Allistar.