Consultation on proposed modification to GST adjustment rules

Following changes to simplify the GST adjustment rules in 2023, Inland Revenue has become aware of a legislative error in the rules. The error prevents some taxpayers who acquired an asset before 1 April 2023 from using the simplified one step adjustment calculation when there was a permanent change of use for that asset (for example, from non-taxable to taxable) on or after 1 April 2023.

The Minister of Revenue has agreed to include remedial amendments to address this issue with retrospective effect in an upcoming omnibus tax bill.

To enable Inland Revenue to process GST returns for affected taxpayers before that bill is expected to become law, the Minister is considering recommending an Order in Council (under section 6D of the Tax Administration Act 1994) to modify the application of the law in these circumstances. The modification would be time-limited and optional for taxpayers to apply.

Making a submission

Submissions are invited on any aspect of the draft Order in Council.

Include in your submission a summary of the major points and recommendations you have made.

Please indicate if officials from Inland Revenue can contact you to discuss the points raised, if required.

The Minister of Revenue has set a closing date for submissions of 12 August 2024.

Submissions made by this date will be considered before the Minister decides whether to recommend an Order in Council be made in these circumstances.

Submissions can be made by email to [email protected] with ‘Modification to GST adjustment rules’ in the subject line.

Release of submissions

Submissions may be the subject of a request under the Official Information Act 1982, which will result in their publication unless there are grounds for the submission (in whole or in part) to be withheld. The withholding of responses on the grounds of privacy, or for any other reason, will be determined in accordance with that Act. If you consider that any part of your submission should properly be withheld under that Act, please clearly indicate this.

DRAFT FOR CONSULTATION - Tax Administration (GST Adjustment Rules) Modification Order 2024

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