What triggers a GST audit in New Zealand?

Common triggers include large or frequent GST refund claims, significant changes in reported turnover, inconsistencies between GST and income tax returns, high-risk industry profiling, late or missing returns, and random selection.

How long must I keep GST records in NZ?

You must keep GST records for at least 7 years. IRD can audit any period within this timeframe, so maintain well-organized records for the full retention period including tax invoices, bank statements, and accounting records.

Can I have an accountant present during an IRD audit?

Yes, absolutely. You have the right to have your accountant, tax agent, or lawyer present during any IRD audit. They can represent you, handle communications with IRD on your behalf, and help ensure your rights are protected.

Verified for 2026 Tax Year

GST Audit Preparation NZ

Everything you need to know about preparing for, navigating, and surviving an IRD GST audit.

Receiving an audit notification from Inland Revenue can be stressful, but with proper preparation, most GST audits are completed without major issues. The key is understanding what IRD is looking for, maintaining excellent records, and knowing your rights throughout the process.

Key Insight: An audit notification doesn't mean you've done something wrong. IRD conducts audits as part of routine compliance checks across all industries. Many audits result in no adjustment at all.

What Triggers a GST Audit

IRD uses sophisticated risk assessment algorithms to identify businesses for audit. Understanding these triggers helps you avoid raising red flags.

High-Risk Indicators

• Large or frequent GST refund claims
• Significant changes in reported turnover
• Inconsistencies between GST and income tax
• High-risk industry profiling (e.g. construction)

Other Triggers

• Random selection (compliance sampling)
• Information from third parties
• Late or missing returns
• Previous compliance issues

7 Years

Record Retention Period

IRD can audit any period within the last 7 years under the Tax Administration Act. Keep everything backed up.

Essential Documents to Prepare

✓
Tax Invoices: Both sales issued and purchases received.
✓
Bank Statements: All business accounts for the audit period.
✓
GST Returns Filed: Copies of all returns submitted via myIR.
✓
Accounting Records: General ledger, GST account reconciliation.
✓
Asset Records: Purchases of vehicles/property with apportionment calculations.

During the Audit: Best Practices

✓ Be cooperative and professional
✓ Respond to requests promptly
✓ Provide exactly what's requested
✓ Keep records of all communications

DON'T

✗ Volunteer info not requested
✗ Guess or estimate (say "I'll check")
✗ Alter or destroy documents
✗ Ignore IRD correspondence

Frequently Asked Questions

What happens if IRD finds errors during an audit?

IRD will issue an assessment for any GST owing, plus Use of Money Interest calculated from the original due date. Shortfall penalties (20-150% of the underpaid tax) may also apply.

Can I dispute an IRD audit outcome?

Yes. If you disagree with IRD's proposed adjustments, you can respond to their Notice of Proposed Adjustment (NOPA) within 2 months, request a conference, and escalate to the Taxation Review Authority if needed.

Can I have an accountant present?

Yes, absolutely. You have the right to have your accountant, tax agent, or lawyer present during any IRD audit.

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