Ways to set up a New Zealand organisation that is also required to file GST (BAS) in Australia

If your business is required to file for GST in Australia, then we recommend you run a separate Australian organisation in Xero, as well as your New Zealand organisation. However, you could also run a single Xero organisation based either in New Zealand or the Global region. We cover the options and how they would work below.

Run New Zealand and Australian accounts from one Xero organisation

  • Set up a New Zealand Xero organisation and run Australian accounts from there.

    If there are only a few transactions, you could consider using a 0% GST rate in your New Zealand organisation for any Australian transactions. You would then manually file your Australian return based on these transactions (they will appear on the GST Audit Report). You would need to keep in mind any necessary exchange rate calculations and ensure that no New Zealand figures are getting picked up in the Australian return.

  • To file your New Zealand GST return, you would need to exclude all Australian GST transactions and carefully audit the GST adjustments, so no Australian items are included (and vice versa: to file your BAS in Australia, you need to ensure all New Zealand transactions are excluded).
  • Use a multi-currency 'Global' Xero organisation and create tax rates for New Zealand and Australia.

    You could create a 'Global' Xero organisation on a pricing plan that includes multi-currency, then have both a 15% GST rate for NZ and a 10% rate for AU transactions. However, you would need to manually select the relevant figures from your generic 'Sales Tax Report' to enter into your GST returns or activity statements, for both New Zealand and Australia.

  • Your filing frequency and basis may be different between New Zealand and Australia, therefore the automated adjustments in the GST return or activity statement would no longer be useful.

Set up separate Australian and New Zealand organisations

Growing business

Initially there may be just a handful of Australian transactions, meaning that there is little manual intervention required regarding the points above. Be aware that if the Australian business is growing and you are going to consider splitting out into separate organisations in the future, then it may be considerably complex to 'unpick' all the Australian from the New Zealand transactions and have a clear set of accounts going forward.

Taking into account the potential drawbacks mentioned above, the time taken for adjustments and increased margin of error for the corresponding manual processes may outweigh the monthly cost of an extra Australian Xero organisation.

Any transfers or reflection of Australian movements that need to be accounted for in the New Zealand organisation (or vice versa) can be done by way of a manual journal.

The Australian organisation will need to go on its own billing account which will be paid by credit card.