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Income Tax Act 2007

Deductions - Specific rules for expenditure types

DB 2: Goods and services tax

You could also call this:

"Tax rules for businesses buying and selling goods and services"

Illustration for Income Tax Act 2007

You are a registered person. You cannot claim a deduction for input tax on goods or services supplied to you. You also cannot claim a deduction for goods and services tax payable to the Commissioner. You can claim a deduction for deductible output tax. This is only if you are allowed a deduction for the cost of acquiring or producing the goods or services. You can also claim a deduction for an amount of depreciation loss for the goods or services. The rules for depreciation loss are in section EE 54. This section is linked to subpart DA. It overrides or adds to the general rules.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1513574.

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Money and consumer rights > TaxesBusiness > Industry rules
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Part DDeductions
Specific rules for expenditure types

DB 2Goods and services tax

  1. A registered person is denied a deduction for the following:

  2. input tax on a supply of goods or services to them:
    1. goods and services tax (GST) payable by them to the Commissioner.

      1. A registered person is allowed a deduction for deductible output tax but only to the extent to which—

      2. they are allowed a deduction for expenditure that they incur in acquiring or producing the goods or services; or
        1. they are allowed a deduction for an amount of depreciation loss for the goods or services.

          1. Subsection (2) does not apply to an adjustment made in relation to a capital asset.

          2. The provisions that apply when an amount of depreciation loss is quantified by reference to the cost of an item of depreciable property to a person are in section EE 54 (Cost: GST).

          3. The link between this section and subpart DA (General rules) is as follows:

          4. subsection (1) overrides the general permission:
            1. subsection (2) supplements the general permission; the general limitations still apply.

              Compare
              Notes
              • Section DB 2(2): amended, on (applying to taxable supplies made on or after 1 April 2011), by section 37(2) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).
              • Section DB 2(2): amended (with effect on 1 April 2008), on (applying for the 2008–09 and later income years), by section 37(1) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).
              • Section DB 2(2): amended (with effect on 1 April 2008), on , by section 10 of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).
              • Section DB 2(3): substituted, on (applying to taxable supplies made on or after 1 April 2011), by section 37(3) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).
              • Section DB 2 list of defined terms deductible output tax: inserted, on , by section 37(4)(a) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).
              • Section DB 2 list of defined terms taxable supply: repealed, on , by section 37(4)(b) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).