GST Direct: Issue 27

Bringing you the latest GST and Customs developments

In this issue:

More GST changes on the horizon

A GST issues paper released on 17 September 2015 by officials (Inland Revenue and Treasury) contains a number of proposed GST policy and remedial issues.

We summarise the two significant GST matters addressed in the issues paper and briefly cover several other GST proposals discussed in the paper.

GST deductions on capital raising costs

IR has been scrutinising capital raising transactions involving IPOs and bond issues. IR has traditionally taken the view that the share or bond issue (to raise capital) is an exempt supply of a financial service. Under this analysis, a business that makes taxable (or partially taxable) supplies is unable to deduct in its GST return any GST charged on capital raising costs (such as GST on legal fees and valuation work).

GST on services to non-residents directly in connection with land in New Zealand

This GST issue concerns services provided to non-residents that relate to land situated in New Zealand. Under the current law and IR practice, certain services performed for a non-resident can be zero-rated even if they relate to land in New Zealand.

We discuss the impact and implications for services offered to non-residents from the issues paper.

GST apportionment for large businesses

There is a welcome GST change on the horizon for large businesses that make taxable and exempt supplies and are required to apportion the amount of GST they may recover. We take a look at the proposed GST change.

Other GST issues covered

There are various other GST matters covered and many of these are good news stories for business. We've included a list of these here.

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