GST rates are not one-size-fits-all. Most countries with GST systems have multiple rates or categories that apply to different types of goods and services. Understanding which rate applies to your products and services is essential for correct invoicing, accurate financial reporting and compliance. Applying the wrong rate can result in underpaying (penalties) or overpaying (cash flow loss) your GST obligations.
Identify the standard GST rate in your country
Learn which goods and services qualify for reduced or zero rates
Understand which items are GST-exempt or input-taxed
Set up your accounting software with all applicable GST codes
Apply the correct rate to each product or service you sell
Review your chart of accounts to ensure GST mapping is accurate
Periodically review rate changes and update your systems accordingly
Businesses in New Zealand operating under the GST system must meet these compliance requirements set by IRD:
Applying the standard rate to items that should be zero-rated or exempt
Not updating rates when government changes are announced
Confusing zero-rated (can claim input credits) with exempt (cannot claim)
Not separating different rate items on invoices
Applying domestic GST rates to export transactions
Not understanding reverse charge rules for imported services
SortBooks connects to your Xero account and finds transactions sitting in catch-all accounts. AI suggests the right account and tax code, learning from your own past coding. You approve it and SortBooks updates Xero. Reconciled transactions are locked by Xero, so those stay in SortBooks with an Open in Xero link.
AI suggests a category and GST code for each transaction. You approve it before anything changes in Xero.
Growth and above get a quarterly GST/VAT estimate to check before you lodge with IRD.
Ask about your P&L, cash and who owes you, using live Xero data. Every dollar figure is checked against Xero.
Australia: 10% standard, 0% for basic food and exports. New Zealand: 15% standard, 0% for financial services and exports. Singapore: 9% standard, 0% for exports. India: 5%, 12%, 18%, 28% depending on goods/services. Canada: 5% federal GST plus provincial rates.
Zero-rated supplies have a 0% GST rate but you can still claim input tax credits on related purchases. Exempt supplies are not subject to GST and you cannot claim input tax credits on related purchases. This distinction is important for your overall GST position.
SortBooks learns your business patterns and automatically applies the correct GST rate to each transaction type. It handles standard, reduced, zero-rated and exempt supplies - adapting to your specific country and business type.
AI suggests, you approve, SortBooks updates Xero. Try it free for 14 days.