GST deregistration can feel like a big step, but sometimes it’s the smartest move for your business. Maybe your turnover has dropped below the threshold, or you’re winding things down and want to cut the admin. Whatever the reason, knowing how to handle GST cancellation the right way will save you headaches later.
In this guide, we’ll cover everything you need: why and when to deregister, the step-by-step process, and what happens after you file your final GST return. We’ll also break down the difference between voluntary GST deregistration and mandatory rules so you’re crystal clear on where you stand.
Ready to make this process simple and stress-free? Let’s dive straight in.
What is GST deregistration?
Before diving into the process, let’s clear up what GST deregistration actually means. It’s the formal process of cancelling your GST registration with Inland Revenue (IRD), which stops you from charging GST on sales and removes the need to file GST returns.
Why deregister? Voluntary vs mandatory deregistration
Deregistering for GST isn’t always optional. There are two main scenarios to consider:
- Voluntary GST deregistration:
- Your turnover is under $60,000 for the last 12 months.
- You want to simplify your business tax obligations.
- You no longer carry on taxable activity.
- Mandatory GST deregistration:
- You’ve stopped trading or your business has closed.
- IRD requires you to deregister if your turnover consistently falls below the threshold.
For more details on GST thresholds, check out GST inclusive vs exclusive to ensure you’re calculating your turnover correctly.
How to complete the GST deregistration process step by step
Cancelling your GST registration isn’t as simple as flicking a switch. Here’s what you need to do.
Step 1: Confirm eligibility
Make sure you’re eligible to deregister. Check:
- Is your turnover below $60,000 in the past 12 months?
- Have you stopped all taxable activities?
- Are there no outstanding GST returns to file?
Step 2: Submit form and timeline
You’ll need to submit a GST deregistration request through myIR or by calling IRD directly. Once submitted, IRD usually processes your request within 10–15 working days.
- Log in to myIR
- Go to “Cancel GST Registration”
- Provide your final date of taxable activity
For more information, consult the IRD – Cancelling GST registration page.
Step 3: File final GST return requirements
Even after you deregister, you still need to file a final GST return covering the period up to your deregistration date.
Here’s what to include:
- Any GST collected on sales up to the deregistration date
- GST on business assets retained after deregistration
- Adjustments for prepayments or credit notes
To simplify your calculations, try our GST calculator NZ.
Benefits of GST deregistration
So why would you go through all this? Let’s break down the key advantages:
| Benefit | Description | When it applies |
|---|---|---|
| Reduced compliance burden | No need to file regular GST returns or maintain GST records. | After deregistration confirmation. |
| Cash flow flexibility | You keep the full sales price (no GST portion). | Once GST is removed from pricing. |
| Avoid penalties | Stops late filing penalties if you’re no longer trading. | Immediately after deregistration. |
Voluntary vs mandatory GST deregistration explained
Understanding the difference between voluntary and mandatory deregistration will keep you compliant.
- Voluntary deregistration
- Your turnover consistently stays below the GST threshold.
- You prefer not to charge GST on future sales.
- Mandatory deregistration
- Your business has ceased trading.
- IRD requires deregistration after an audit or review.
For those considering registration again in the future, see how to become GST registered.
Common pitfalls and what to watch during GST cancellation
GST deregistration isn’t without risks. Here are mistakes to avoid:
- Failing to file a final GST return
- Keeping business assets without adjusting GST on their value
- Missing important deadlines
Do’s and don’ts summary
| Do’s | Don’ts |
|---|---|
| File your final GST return early | Forget to account for GST on retained assets |
| Notify IRD of all changes | Assume deregistration happens instantly |
| Adjust pricing for non-GST sales | Continue charging GST post deregistration |
Bonus for GST deregistration
Here are extra tools and tips to make life easier:
- Use online GST calculators to check thresholds.
- Seek professional advice to avoid surprises at tax time.
- Review 2-monthly GST due dates if you’re planning your final filing.
IMAGE (downloadable checklist graphic: “Steps for GST Deregistration”)
Conclusion: wrapping up GST deregistration
Navigating GST deregistration doesn’t have to be complicated. Whether you’re doing it voluntarily to simplify your tax obligations or because IRD requires it, understanding the process and your responsibilities is key. From submitting your request to filing your final GST return and avoiding common mistakes, you now have a clear roadmap.
If you’re unsure about next steps or want to avoid potential pitfalls, it’s worth seeking professional advice. At BH Accounting, we’re here to connect you with the right tax professionals so you can move forward confidently.
Ready to take the stress out of GST? Let’s get in touch today.
FAQ about GST deregistration
How long does GST deregistration take?
Usually 10–15 working days once IRD receives your request.
Do I need to keep records after deregistration?
Yes, you must keep GST records for at least 7 years, even after deregistering.
Can I re-register for GST later?
Yes, you can reapply through myIR if your turnover exceeds $60,000 again.
Will I get a refund if I overpaid GST before deregistration?
IRD will process any credits or refunds with your final return.