New Zealand: Clarification on GST input deductions and taxable activity requirements

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The New Zealand Inland Revenue released Technical Decision Summary No. 23/11, offering clarity on GST input deductions and taxable activity requirements. In this case, a GST-registered company had claimed input deductions for specific periods. However, the Tax Agency’s compliance department conducted a reassessment of GST due to a lack of supporting documentation and proposed the retrospective cancellation of the taxpayer’s GST registration. Upon review, the Tax Counsel Office determined that:


  1. The taxpayer’s sporadic issuance of invoices did not sufficiently demonstrate continuous or regular engagement in a taxable activity.
  2. The provided invoices were issued to another party and did not serve as evidence of goods or services acquisition.
  3. The taxpayer failed to furnish contracts, correspondence, or explanations indicating the nature of the activities undertaken.
  4. Consequently, the cancellation of its registration was considered.



Source: taxtechnical.ird.govt.nz

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