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Officials call for feedback on proposed GST rule fixes

17 September 2015

An officials’ issues paper released today seeks feedback on options to improve the way certain GST-related rules work in practice. For more information see the media statement and the issues paper, GST – Current issues.


Hon Todd McClay
Minister of Revenue

17 September 2015

Media statement

Feedback sought on GST rule fixes

Revenue Minister Todd McClay has welcomed the release today of an issues paper that provides options to improve the way certain GST-related rules operate in practice.

“The practical solutions to the issues discussed in this paper are a good example of private and public sector cooperation, and illustrate the benefits of consultation in making sure our tax rules remain current, and that they work well in practice,” says Mr McClay.

“While our GST system generally works well, it is important that the system remains broad-based and fair.”

For this reason the paper discusses two topical issues:

  • the deductibility by businesses of GST associated with the costs of raising capital that arise, for example, in expanding the business. This will ensure that GST does not become an additional cost for businesses in these situations; and
  • when GST should be paid on services such as real estate agent and legal services provided to non-residents in connection with land purchases in New Zealand, so that the rules are aligned better with those for New Zealand residents.

“A number of largely technical concerns are also discussed where either the legislation may not fully give effect to the underlying policy or when technical changes could improve the way the rules work in practice,” says Mr McClay.

These deal with problems such as:

  • the eligibility of large, partially exempt, businesses (such as retirement village operators) to agree an alternative method of apportionment;
  • the ability to take a deduction for second-hand goods composed partially of gold, silver and platinum; and
  • clarifying the periods for refunds, and for the Commissioner of Inland Revenue to seek further information.

Following feedback on the solutions discussed in the paper, Mr McClay says final proposals are expected to be included in the next available omnibus tax bill.

The officials’ issues paper, GST – Current issues, can be found at www.taxpolicy.ird.govt.nz

Submissions close on Friday 30 October 2015.

Media contact: Lesley Hamilton  027 490 1345