Goods and services tax webinar - changes in April 2025

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Title: Goods and Services Tax Webinar

Changes coming in April 2025

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Kia ora everyone and welcome to this webinar.

My name is Helen Mitchell with me today is Vicki Cronin. We are Relationship Managers at Inland Revenue.

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Nau mai

Haere mai

Welcome

Title: Topics

• GST on listed services
• GST
• Overview of additional GST changes

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In this webinar we’ll be taking you through the GST changes that are proposed to come into effect on or before 1 April 2025 – this will cover:

• GST on listed services
• Wider GST changes
• And an overview of some smaller GST changes, including minor clarifications and amendments.

Please note: The information in this presentation is current as at 10 March 2025 and may be subject to change.

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Title: GST on Listed Services

Image: A person in the passenger seat of a vehicle using a smartphone

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We’ll start by looking at the changes for GST on listed services.

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Title: Listed Services

Sub-title: Flat-rate credits and income tax

Sellers (drivers, deliverers and accommodation owners) will have the option to treat flat-rate credits as assessable income or as excluded income

Choosing to include flat-rate credits as assessable income - deduct all expenditure on a GST-inclusive basis

Choosing to treat flat-rate credits as excluded income:

• Claim expenses relating to online marketplace sales on a GST-exclusive basis
• Claim expenses relating to sales made in other ways on a GST-inclusive basis

Backdated to apply from the 2024-25 income year

New factsheet AD283 will provide more information and examples

Applies from 1 April 2025

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Flat-rate credits and income tax.

Sellers, that is drivers, deliverers and accommodation owners, who provide listed services through an online marketplace, will have the option to treat flat-rate credits as assessable income in their income tax return or to exclude them.

Choosing to include flat-rate credits as assessable income will mean they will be able to deduct expenditure on a GST-inclusive basis. This removes the need for complex apportionment calculations. However, for this to be an option, they can’t be registered for GST at the time they received the flat-rate credits.

If they choose to treat their flat-rate credits as excluded income, they must:

• Claim expenses relating to online marketplace sales on a GST-exclusive basis
• Claim expenses relating to sales made in other ways on a GST-inclusive basis

This means, expenses relating to income from the sale of listed services made through an online marketplace and in other ways will need to be apportioned. Some customers may find this difficult and time consuming.

This choice will apply from the 2024-25 income year.

Once the bill receives Royal assent, we will publish a new factsheet called Flat-rate credits and income tax AD283. This will provide more information and examples showing how to work out deductible expenses under both options. It also illustrates appropriate apportionment methods for short-stay accommodation and ride-sharing.

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Title: Listed Services

Sub-title: Clarification of deduction rule for flat-rate credits

Must have a record of the seller’s name, IRD number and GST registration status

The seller must provide their details before the credit adjustment can be claimed

Taxable periods beginning on or after 1 April 2025

Applies for taxable periods beginning on or after 1 April 2025

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Currently, an online marketplace or listing intermediary can claim a credit adjustment for a flat-rate credit if the seller has not told them their GST registration status.

An amendment will be made so they can only claim a credit adjustment for the flat-rate credits they pass onto a seller if they have a record of the seller’s name, IRD number and GST registration status.

This means the seller must provide their details to the online marketplace or listing intermediary before the credit adjustment for the flat-rate credit can be claimed. As a result, some online marketplaces and listing intermediaries may choose to not pass on any flat-rate credits until the seller has provided their details.

This change will apply for taxable periods beginning on or after 1 April 2025. 

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Title: Listed Services

Sub-title: Timing of GST on accommodation supplied through an online marketplace

More options for accounting for GST on the supply of taxable accommodation:

• No later than 7 days after the check-out date
• On an earlier date (such as check-in date)

Normal timing rules for their accounting basis

The same treatment does not need to be applied

The deduction for a flat-rate credit cannot be claimed before the taxable period the GST on the related supply is accounted for

If the new options are used, time of supply is not affected

Backdated to apply from 1 April 2024.

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Online marketplaces and listing intermediaries will have more options for when they account for GST on the supply of taxable accommodation. They will need to account for it no later than 7 days after the check-out date. But they can choose to account for it on an earlier date such as the check-in date.

If these options are not chosen, then they will continue to account for GST using the normal timing rules for their accounting basis.

These options will also be available to accommodation owners who have opted out of the marketplace rules where the supply of taxable accommodation is made through an online marketplace.

Services that are closely connected to the supply of the taxable accommodation will also be included.

The same treatment does not need to be applied to all supplies of taxable accommodation made through an online marketplace.

If a flat-rate credit also applies to the supply, the deduction for the flat-rate credit cannot be claimed before the taxable period the GST on the related supply is accounted for.

We do not need to be notified of the choice made.

Evidence of the choice must be kept for at least 7 years.

An online marketplace and a listing intermediary can account for GST at different times. There is no need for all parties in a supply to apply the options consistently.

If the new options are used, time of supply is not affected. This means the following continue to apply:

A GST-registered recipient can claim GST at the normal time.

When an online marketplace or listing intermediary is responsible for providing taxable supply information, they must provide it without the recipient asking for it.

When the accommodation owner is responsible for providing taxable supply information, they must provide it within 28 days of a request for it by the recipient.

This change is backdated to apply from 1 April 2024.

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Title: Listed Services

Sub-title: Listing intermediaries and taxable supply information

When a listing intermediary is liable to pay GST on the supply of taxable accommodation, they will be able to agree with the online marketplace to become responsible for providing taxable supply information and supply correction information.

This agreement must be in writing and state that the listing intermediary’s details (name and GST registration number) will be included in the information, not the online marketplaces.

This will apply from 1 April 2024

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When a listing intermediary is liable to pay GST on the supply of taxable accommodation, they will be able to agree with the online marketplace to become responsible for providing taxable supply information and supply correction information.

This agreement must be in writing and state that the listing intermediary’s details (name and GST registration number) will be included in the information, not the online marketplaces.

This will apply from 1 April 2024.

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Title: Listed Services

Sub-title: Requirements on sellers to notify certain information

Currently a seller who makes more than $500,000 supplies in a 12-month period, can choose to opt out of the marketplace rules, but they need to tell the online marketplace they are choosing to do this.

When a listing intermediary is also involved, the accommodation owner will need to tell the listing intermediary instead.

The listing intermediary will then need to tell the online marketplace if the online marketplace would normally have been responsible for paying the GST on the supply.

This will apply from the day after the Bill receives Royal assent.

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Currently a seller who makes more than $500,000 supplies in a 12-month period, can choose to opt out of the marketplace rules, but they need to tell the online marketplace they are choosing to do this.

When a listing intermediary is also involved, the accommodation owner will need to tell the listing intermediary instead.

The listing intermediary will then need to tell the online marketplace if the online marketplace is responsible for collecting and paying the GST.

This will apply from the day after the Bill receives Royal assent.

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Title: Listed Services

Sub-title: Timing of when an online marketplace must issue taxable supply information

Within 28 days of time of supply (unless the seller has opted out of the marketplace rules)

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The final change for listed services relates to when an online marketplace must issue taxable supply information. They will need to provide the recipient of listed services with taxable supply information within 28 days of time of supply unless the seller has opted out of the marketplace rules.

It is important to note that the recipient does not need to request the information.

This brings us to the end of the changes for GST on listed services.

I will now pass you over to Vicki.

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Title: GST

Image: Close up of payment card being inserted into an EFTPOS machine

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Thanks Helen. Now we’ll move on to the wider GST changes.

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Title: GST

Sub-title: Approved taxable period end dates

GST-registered persons will have greater flexibility when applying to have alternative dates as their taxable period end dates.

This will apply to all resident and non-resident GST-registered persons.

An application to change the end date of a taxable period will need to be made in writing.

This will be backdated to apply from 30 March 2022

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Approved taxable period end dates.

GST-registered persons will have greater flexibility when applying to have alternative dates as their taxable period end dates.

This will apply to all resident and non-resident GST-registered persons.

An application to change the end date of a taxable period will need to be made in writing.

This change is backdated to apply from 30 March 2022.

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Title: GST

Sub-title: Election to zero-rate B2B financial services

From 1 April 2025, the requirement for a financial service supplier to notify us of their election to zero-rate qualifying business-to-business (B2B) supplies of financial services will be removed.

GST-registered financial service suppliers will be able to elect by taking the relevant position in a GST return. This will be by either:

returning zero-rated supplies

claiming expenses relating to the supplies.

Financial service suppliers making both exempt and zero-rated supplies can ask us to approve an agreed apportionment and adjustment method.

Applies from 1 April 2025

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Election to zero-rate B2B financial services.

From 1 April 2025, the requirement for a financial service supplier to notify us of their election to zero-rate qualifying business-to-business (B2B) supplies of financial services will be removed.  

GST-registered financial service suppliers will be able to elect by taking the relevant position in a GST return. This will be by either: 

• Returning zero-rated supplies or  
• Claiming expenses relating to the supplies  

Financial service suppliers making both exempt and zero-rated supplies can ask us to approve an agreed apportionment and adjustment method. 

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Title: GST

Sub-title: Agreed adjustment methods and limitations on adjustments

GST-registered persons can agree with us a “fair and reasonable” adjustment method.

A change is being made so an adjustment method can be agreed that applies to all the persons assets and not just those purchased for more than $10,000.

This change will be backdated to apply from 18 March 2019

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Agreed adjustment methods and limitations on adjustments.

GST-registered persons can agree with us a “fair and reasonable” adjustment method.

A change is being made so an adjustment method can be agreed that applies to all the persons assets and not just those purchased for more than $10,000.

This change will be backdated to apply from 18 March 2019.

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Title: GST

Sub-title: Distributions made by GST-registered unit title body corporate to members

A GST-registered unit title body corporate will be able to claim GST on funds it distributes to its members.

If a member who receives the distribution is also a GST-registered person, they will be required to pay GST on the distribution to the extent they are using the unit to make taxable supplies

This will apply from the day after the Bill receives Royal assent

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Distributions made by GST-registered unit title body corporate to members.

A GST-registered unit title body corporate (often used by apartment building owners) will be able to claim GST on funds it distributes to its members.

If a member who receives the distribution is also a GST-registered person, they will be required to pay GST on the distribution to the extent they are using the unit to make taxable supplies.

This will apply from the day after the Bill receives Royal assent.

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Title: GST

Sub-title: Non-residents and definition of “percentage actual use” in adjustment rule

The definition of "percentage actual use" in the adjustment rules will be amended so that GST-registered non-residents measure taxable supplies and total supplies by treating all their supplies as if they were made and received in New Zealand.

This change will be backdated to apply from 1 April 2020

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Non-residents and definition of “percentage actual use” in adjustment rule.

The definition of "percentage actual use" in the adjustment rules will be amended so that GST-registered non-residents measure taxable supplies and total supplies by treating all their supplies as if they were made and received in New Zealand.

This change will be backdated to apply from 1 April 2020.

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Title: Overview of additional GST changes

Image: Person reviewing paperwork at a stand-up table

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Now we’ll cover some smaller GST changes, including minor clarifications and amendments.

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Title: GST - minor clarifications and amendments

Clarification of taxable activity exclusion on deregistration

When a person deregisters, certain qualifying goods are excluded from the definition of taxable activity, so GST is not required to be paid for them. These are usually dwellings with a minor business use (such as a home office) that have been treated as not being used to make taxable supplies.

Quarterly filing for certain non-resident suppliers

A non-resident supplier must have a 3-month (quarterly) taxable period if its only supplies in New Zealand are of remote services, low value imported goods, and/or listed services

Clarification of grouping rules

A non-taxable supply by a non-registered GST group member is treated as a supply by the representative member as a registered person.

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There are three minor clarifications and amendments that you may be interested in.

The first is the clarification of taxable activity exclusion on deregistration. When a person deregisters, certain qualifying goods are excluded from the definition of taxable activity, so GST is not required to be paid for them. These are usually dwellings with a minor business use (such as a home office) that have been treated as not being used to make taxable supplies.

The second relates to certain non-resident suppliers and will mean a non-resident supplier must have a 3-month (quarterly) taxable period if their only supplies in New Zealand are of remote services, low value imported goods, and/or listed services.

The third is a clarification of the grouping rules. A non-taxable supply by a non-registered GST group member will be treated as a supply by the representative member as a registered person.