Appendix 2 - Current law
|There are currently no specific rules for bodies corporate in the GST Act. The main rules for applying GST are set out below.|
Goods and Services Tax Act 1985
Section 2(1) of the GST Act defines “consideration” as:
consideration, in relation to the supply of goods and services to any person, includes any payment made or any act or forbearance, whether or not voluntary, in respect of, in response to, or for the inducement of, the supply of any goods and services, whether by that person or by any other person; but does not include any payment made by any person as an unconditional gift to any non-profit body:
Section 6(1) of the GST Act defines “taxable activity” as:
6. Meaning of term “taxable activity”
(1) For the purposes of this Act, the term taxable activity means—
(a) any activity which is carried on continuously or regularly by any person, whether or not for a pecuniary profit, and involves or is intended to involve, in whole or in part, the supply of goods and services to any other person for a consideration; and includes any such activity carried on in the form of a business, trade, manufacture, profession, vocation, association, or club:
(b) without limiting the generality of paragraph (a), the activities of any public authority or any local authority.
Section 8(1) of the GST Act collects GST from registered persons on their supplies of goods and services:
8 Imposition of goods and services tax on supply
(1) Subject to this Act, a tax, to be known as goods and services tax, shall be charged in accordance with the provisions of this Act at the rate of 15% on the supply (but not including an exempt supply) in New Zealand of goods and services, on or after 1 October 1986, by a registered person in the course or furtherance of a taxable activity carried on by that person, by reference to the value of that supply.
Section 51 of the GST Act contains the rules for registering people for GST:
51 Persons making supplies in course of taxable activity to be registered
(1) Subject to this Act, every person who, on or after 1 October 1986, carries on any taxable activity and is not registered, becomes liable to be registered—
(a) at the end of any month where the total value of supplies made in New Zealand in that month and the 11 months immediately preceding that month in the course of carrying on all taxable activities has exceeded $60,000 (or such larger amount as the Governor-General may, from time to time, by Order in Council declare):
provided that a person does not become liable to be registered by virtue of this paragraph where the Commissioner is satisfied that the value of those supplies in the period of 12 months beginning on the day after the last day of the period referred to in the said paragraph will not exceed that amount:
(b) at the commencement of any month where there are reasonable grounds for believing that the total value of the supplies to be made in New Zealand in that month and the 11 months immediately following that month will exceed the amount specified in paragraph (a):
provided that any such person shall not become liable where the Commissioner is satisfied that that value will exceed that amount in that period solely as a consequence of—
(c) any ending of, including a premature ending of, or any substantial and permanent reduction in the size or scale of, any taxable activity carried on by that person; or
(d) the replacement of any plant or other capital asset used in any taxable activity carried on by that person; or
(e) the supply, to persons who are non-residents but are physically present in New Zealand, of telecommunications services that are treated as being supplied in New Zealand under sections 8(6) and 8A.
(2) Every person who, by virtue of subsection (1), becomes liable to be registered shall apply to the Commissioner in the prescribed form for registration under this Act, within 21 days of becoming so liable, and provide the Commissioner with such further particulars as the Commissioner may require for the purpose of registering that person.
(3) Notwithstanding subsections (1) and (2), every person who satisfies the Commissioner that, on or after 1 October 1986,—
(a) that person is carrying on any taxable activity; or
(b) that person intends to carry on any taxable activity from a specified date,—
may apply to the Commissioner in the prescribed form for registration under this Act, and provide the Commissioner with such further particulars as the Commissioner may require for the purpose of registering that person.
(4) Where any person has—
(a) made application for registration pursuant to subsection (2), (3), or section 54B, and the Commissioner is satisfied that that person is eligible to be registered under this Act, that person shall be a registered person for the purposes of this Act with effect from such date as the Commissioner may determine; or
(b) not made application for registration pursuant to subsection (2), and the Commissioner is satisfied that that person is liable to be registered under this Act, that person shall be a registered person for the purposes of this Act with effect from the date on which that person first became liable to be registered under this Act:
provided that the Commissioner may, having regard to the circumstances of the case, determine that person to be a registered person from such later date as the Commissioner considers equitable
Unit Titles Act 2010
Section 5 of the Unit Titles Act 2010 defines a body corporate:
body corporate means a body corporate of a unit title development created under section 75 on the deposit of a unit plan
Section 75 of the Unit Titles Act 2010 creates a body corporate as a legal entity separate from the unit owners:
75 Creation of body corporate
(1) When a unit plan is deposited under section 17 (and in the case of a staged development, when the first stage unit plan is deposited under section 24), a body corporate is created and is the body corporate for the unit title development created by the deposit of that unit plan.
(2) When a unit plan is deposited under section 21 (and in the case of a staged development, when the first stage unit plan is deposited under section 24), a subsidiary body corporate is created and is the body corporate for the subsidiary unit title development created by the deposit of that unit plan.
Section 84(1) of the Unit Titles Act 2010 sets out the powers and duties of the body corporate:
84 Powers and duties of body corporate
(1) The body corporate has the powers and duties set out in—
(a) sections 38 to 42 (which relate to the fixing and reassessment of the ownership interest and the utility interest):
(b) section 81 (which permits the body corporate to act as an agent for the unit owners who lease or licence their principal unit and are absent for the purpose of enforcing the body corporate operational rules):
(c) section 85 (which requires the body corporate to keep and maintain a register of all the owners of principal units and accessory units on the plan):
(d) section 86 (which relates to the body corporate's power to sign documents on behalf of the owner):
(e) section 87 (which requires the payment of ground rental to a lessor):
(f) section 90 (which relates to the calling of general meetings):
(g) section 105(3) (which requires the body corporate to comply with the body corporate operational rules):
(h) section 108 (which is the general power of delegation):
(i) sections 115 and 117 to 120 (which relate to the establishment and maintenance of the funds):
(j) section 116 (which requires the body corporate to establish and maintain a long-term maintenance plan):
(k) section 121 (which relates to the raising of amounts for each fund and the imposition of levies on the unit owners to establish and maintain each fund):
(l) sections 130 and 131 (which relate to the spending, borrowing, and investing of money and the distribution of surplus money and property):
(m) section 132 (which relates to the keeping of accounting records and submission of its yearly financial statements to an independent auditor):
(n) section 135 (which relates to insurance of the buildings and other improvements on the land):
(o) section 136(4) (which relates to the application of insurance moneys in or towards reinstatement of the development):
(p) section 138 (which relates to repair and maintenance of the common property, assets designed for use in connection with the common property, infrastructure, and building elements and access for those purposes):
(q) section 206 (which relates to the provision of records and documents on request from a unit owner):
(r) any other provisions of this Act, any other Act, or the regulations that confer powers or duties on the body corporate and subject to any limitations to those powers and duties in this Act, any other Act, or the regulations.
Section 121 of the Unit Titles Act 2010 gives a body corporate the power to impose levies on owners. Subsections (1) and (2) provide:
121 Contributions to be levied on unit owners
(1) A body corporate may determine from time to time the amounts to be raised for each fund and impose levies on the owners of principal units to establish and maintain each fund.
(2) The levies must be calculated as follows:
(a) in the case of the operating account, long-term maintenance fund, and any contingency fund, in proportion to each unit owner’s utility interest; and
(b) in the case of any capital improvement fund, in proportion to each unit owner’s ownership interest.
The Unit Titles Act 1972 applied up until 1 October 2012 when it was repealed and replaced by the Unit Titles Act 2010. In particular, clause 219 of the Unit Titles Act 2010 means the 2010 Act now applies to pre-2010 Unit titles.
219 Existing unit title developments
(1) In this subpart, an existing unit title development means the stratum estates to which a particular unit plan within the meaning of the Unit Titles Act 1972 relates where the unit plan—
(a) was deposited before the commencement of this Act; and
(b) has not been cancelled.
(2) An existing unit title development is a unit title development under this Act and the body corporate for the unit plan that relates to that unit title development is, for the purposes of this Act and for all other purposes, the body corporate for that unit title development.