Verified for 2026 Tax Year

GST on Gift Cards & Vouchers

Specific rules apply to when GST is triggered on retail vouchers. Are you charging tax at the right time, or accidentally paying early?

In New Zealand, the GST treatment of gift cards and vouchers depends entirely on whether the voucher is for a specific product or a generic dollar amount. The legal timing of when you pay the 15% GST to the IRD hinges on this single distinction.

The Core Rule: Deferral

GST is generally not triggered when a generic "dollar-value" gift card is sold. Instead, the transaction is treated as receiving a deposit. The tax is only recognized and paid when the customer actually spends the card on taxable goods or services later.

Generic vs. Specific Vouchers

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Generic Vouchers

A $50 gift card that can be used for anything in-store. Treated as a cash token.

GST Charged at REDEMPTION

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Specific Vouchers

A voucher for a "One Hour Massage". The exact good/service is already defined.

GST Charged at SALE

Unredeemed Vouchers (The "Breakage" Rule)

If a gift card expires without being used, the business legally gets to keep the money. Since no goods or services were actually provided, the IRD requires you to account for GST on this "windfall" income as soon as the card officially expires.

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Monitor expiry dates of all issued cards in your accounting software.
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Manually include expired card values in your GST return as a taxable supply for that period.

Warning: Don't Double-Tax

If you account for GST on the initial sale of a "Specific Voucher", you must make sure your Point of Sale (POS) system is configured correctly so it doesn't accidentally charge GST a second time when the customer brings the physical voucher in to redeem it!

Multi-Purpose Vouchers

If a voucher can be used across different businesses or for both taxable and exempt supplies (like a large shopping mall voucher that works at a taxable clothing store but also an exempt financial kiosk), it is always treated as a generic voucher. GST only happens at the point of redemption at the specific store.

Frequently Asked Questions

Do I charge GST on the sale of a gift card?

Generally, no. Generic gift cards are treated as a deposit or token. You only charge and account for GST when the customer redeems the gift card for taxable goods or services.

What happens to GST if a gift card expires?

When a gift card expires unredeemed (the 'breakage' rule), the business must account for GST on the remaining balance in their next return, as the money is now considered business income.

What is the difference between specific and generic vouchers?

Specific vouchers are for a strictly defined service (like a 'One Hour Massage') and trigger GST at the time of sale. Generic vouchers represent a cash value (like '$50 store credit') and trigger GST only at redemption.

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