GST Guide - IR375

1 IR 375 April 2009 GST guideWorking with GSTThe information in this booklet is based on current GST laws at the time of GST Guide INLAND our website for services and information. Go to: Get it done online to file returns, register for services and access account information Work it out to calculate tax, entitlements, repayments and due dates and to convert overseas income to New Zealand to get our forms and guidesYou can view copies of all our forms and guides mentioned in this booklet by going to and selecting Forms and guides or you can order copies by calling INFO express see page 3 NoteIntroductionWe ve written this Guide for all businesses and organisations that have to charge GST and need information about how to do this. We hope you ll find it helpful when filling in your GST returns.

2 It s designed to help you, show you how to avoid incurring penalties and how and when GST is refunded to you also pay provisional tax, this Guide will help you complete your GST and provisional tax return (GST 103).If you re not familiar with some of the terms that we use please refer to the glossary see page can also get more information by calling one of our toll-free enquiry numbers see page 77. If you haven t yet registered for GST, you ll find our booklet GST do you need to register? (IR 365) you re thinking of using the ratio option to work out your provisional tax you ll need to refer to our Provisional tax (IR 289) to noteLate filing penalties on GST returnsFrom 1 April 2008, if you don t file your GST return (GST 101 or GST 103) by the due date, you may be charged a late filing penalty see page date for GST returns and paymentsFrom 1 April 2007, the due date for GST returns and payments is the 28th of the month following the end of the return period, except for the periods ending.

3 30 November the due date is 15 January of the following year 31 March the due date is 7 and provisional tax due dates have been combined from the start of the 2008 09 tax GST and provisional tax return (GST 103)A new GST and provisional tax return (GST 103) is available so you can work out and pay your GST and provisional tax at the same to use this guidePart 1 General informationThis part briefly outlines your obligations as a GST-registered 2 OptionsThere are choices to make about how and when you account for GST. This part explains the options available to you. It also covers the special registration options that are available to some people and 3 PaperworkThis part covers the records you need to keep, tax invoices and how to complete your GST return or GST and provisional tax 4 SuppliesThis part looks at supplies you may provide as part of your taxable activities.

4 We tell you how and when to account for some special supplies, such as repossessions, door-to-door sales and hire purchase agreements. Exempt and zero-rated supplies are also 5 AdjustmentsThis part explores the question of tax adjustments and how to work them 6 PenaltiesThis part tells you about the penalties and charges if you fail to meet your tax 7 ServicesThis tells you about help and information available from us. GlossaryThe glossary explains many of the words and terms we use in this the index to find where specific points are located in the Guide . This will help you to find information quickly. 4 GST Guide INLAND 2 Introduction 3 Changes to note 3 How to use this Guide 3 Part 1 - General information When you must register 7 GST registration 7 Turnover 7 When you don t charge GST 7 What you need to do 7 Change in status 7 Part 2 - Options What your options are 8 Invoice basis 8 Payments (or cash) basis 8 Hybrid basis 9 Changing your accounting basis 9 How often do you account for GST (taxable periods)

5 10 Registration of branches or divisions 12 Registration of non-profit bodies 12 Group registration of companies 13 GST application for group registration 14 Group registration for other registered persons 15 Registration of personal representatives, liquidators, receivers and mortgagees-in-possession 15 GST cancellation 15 Part 3 - Paperwork Record keeping 17 Tax invoices 17 Credit notes 21 Debit notes 21 Completing your GST return 22 Completing your GST and provisional tax return 26 What to do next 31 Electronic filing 31 GST to pay 31 GST refunds 32 Interest on refunds 33 Nil balances 33 What happens if you don t file 33 Cashbook for the payments basis 34 Assessment and declaration 36 Statement of account 36 Part 4 - Supplies What are supplies?

6 37 Zero-rated supplies 37 Sale of a going concern 37 Exported goods 38 Supplies to foreign-based pleasure craft 38 Goods destroyed prior to export 38 Goods not in New Zealand at the time of supply 38 Duty-free shops 38 Exported vessels (ships) 38 Exported aircraft 38 Goods and services directly related to temporary imports 38 Transport of passengers to and from New Zealand 39 Transport of goods to and from New Zealand 39 Domestic transportation of household goods 39 Services performed outside New Zealand 39 Services zero-rated even if performed in New Zealand 39 Services relating to goods outside New Zealand 39 Services supplied to non-residents outside New Zealand 39 Services performed in New Zealand for a third party 40 Services relating to moveable personal property 40 Services relating to goods to be exported 40 Granting of rights for use outside New Zealand 40 Restraint of trade 40 Certain supplies of financial

7 Services 41 Certain imported services 41 Exempt supplies 41 Financial services 41 Donated goods and services sold by a non-profit body 42 Renting a residential dwelling 42 Residential accommodation under a head lease 42 Supply of fine metals 42 Penalty interest 42 Special supplies 43 Secondhand goods 43 Secondhand goods if seller is not GST-registered 43 Exported secondhand goods 43 Supplies to associated persons 44 Supply to registered associated persons 44 Supply to unregistered associated persons 44 Time of supply between associated persons 5 Changes in price (credit and debit notes) 44 Hire purchase agreements 46 Repossessions 46 Advance payments 47 Periodic payments and hire agreements 47 Successive supplies and progress payments 47 Delayed settlement transactions 47 Foreign currency payments 47 Full price not known at the time of supply 48 Dishonoured cheques 48 Lay-by sales 48 Door-to-door sales 49 Auctions and auctioneers 49 Agents 49 Tenders 49 Gaming machines 50 Lotteries and other games of chance 50 Tokens.

8 Stamps and vouchers 50 Coin and token-operated machines 51 Accommodation 51 Insurance 52 Private dwellings as part of taxable activity 52 Sale of interest in a taxable activity 52 Grants and subsidies 52 Local authority rates 52 GST on imported services reverse charge 53 Part 5 - Adjustments Calculation sheet for GST adjustments 55 Apportionment methods 56 Depreciation rates 56 Private use of business goods or services 57 Adjustment for partnership and trust 60 Private use of a business motor vehicle 61 Business use of private goods or services 62 Business use of a private motor vehicle 64 Private assets used in business costing less than $18,000 (a one-off adjustment) 65 Private assets used in business costing more than $18,000 65 Home office expenses 65 Assets kept after you cease to be registered 66 Change of accounting basis 67 Goods and services used in making exempt supplies 68 Bad debts written off 70 Barter 71 GST paid to, or invoiced by.

9 The New Zealand Customs Service 71 Entertainment expenses 72 GST on fringe benefits 73 Part 6 - Penalties and interest Late payment penalties 75 Interest rules 75 Offences and penalties 75 Publishing the names of tax evaders 76 Shortfall penalties 76 Voluntary disclosure 76If you disagree 76 Audits 76 Part 7 - Services INFO express 77 How to contact us 77 Customer Service Quality monitoring 77 Large Enterprises 77 Non-resident contractors 78 Non-resident entertainers 78 Electronic filing 78 Business Tax Information Service and Kaitakawaenga Ma ori 78 GST News 78 Tax Information Bulletin (TIB) 78 Privacy 79If you have a complaint about our service 79 Publications 80 Glossary 81 Index 7 General informationNoteGoods and services tax (GST) is a tax on the supply of most goods and services in New Zealand.

10 It also applies to imported goods and certain imported services. It is generally charged and accounted for at a rate of on all taxable supplies see page and organisations who have registered with us collect GST from their customers on behalf of the government. They are also responsible for returning GST on certain services they import from a non-resident supplier who is outside New Zealand. The New Zealand Customs Service administers the collection of GST on imported you must registerIf you re conducting a taxable activity that makes supplies in New Zealand you must register for GST if the following applies to you: your annual turnover based on the value of your supplies (including certain imported services you receive) for this month and the last eleven months has exceeded $60,000, or your turnover based on the value of your supplies (including certain imported services you receive) for this month and the next eleven months is expected to exceed $60,000, or you supply GST and/or services with GST included in your prices, eg taxi drivers who have included in their compulsory registration threshold is $60, registrationIf you haven t yet registered for GST make sure you read our booklet GST do you need to register?