New Zealand: Clarification on GST input deductions and taxable activity requirements
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:
- The taxpayer’s sporadic issuance of invoices did not sufficiently demonstrate continuous or regular engagement in a taxable activity.
- The provided invoices were issued to another party and did not serve as evidence of goods or services acquisition.
- The taxpayer failed to furnish contracts, correspondence, or explanations indicating the nature of the activities undertaken.
- Consequently, the cancellation of its registration was considered.
Source: taxtechnical.ird.govt.nz
