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Goods and Services Tax Act 1985

Transitional provisions

85B: Certain contracts entered into before 1 October 2016

You could also call this:

"Contracts started before 1 October 2016 with regular payments have special tax rules"

Illustration for Goods and Services Tax Act 1985

If you have a contract for remote services that started before 1 October 2016 and ends after that date, this section might apply to you. The contract must have periodic payments that are usually treated as separate supplies under section 9(3)(a). You must also have a contract where the price is set or reviewed for periods of 396 days or less.

When you have a contract like this, you can choose to treat the periodic payments as a single supply, not separate ones, for a certain period. This period starts on 1 October 2016 and ends on the earliest of either the date the contract ends or 396 days after the contract started.

You make this choice in your tax return for the relevant period, which means you tell the tax department about it when you file your taxes.

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This page was last updated on

View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM6977092.

Topics:
Money and consumer rights > Taxes
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85: Certain contracts entered into on or before 20 August 1985, or

"Contracts signed before 20 August 1985 have special tax rules"

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85C: Certain contracts entered into before 1 December 2019, or

"Contracts started before 1 December 2019 with regular payments"

Part 12Transitional provisions

85BCertain contracts entered into before 1 October 2016

  1. This section applies to a supply of remote services when—

  2. the contract under which the supply is made is for a fixed term that starts before 1 October 2016 and ends after that date; and
    1. the contract provides for periodic payments that are treated under section 9(3)(a) as successive supplies; and
      1. under the contract, the consideration for the supply is set or reviewed for periods of 396 days or less during the term of the contract; and
        1. section 8(3)(c) would apply in relation to the supply in the absence of this section.

          1. Despite section 9(3)(a), for the period described in subsection (3), the supplier of the remote services may choose to treat the periodic payments as not successively supplied for successive parts of the period of the contract. The election is made in a return for the relevant taxable period.

          2. The period starts on 1 October 2016 and ends on the earlier of—

          3. the date on which the term of the contract ends; and
            1. the date that is 396 days after the date on which the contract was entered into.

              Notes
              • Section 85B: inserted, on , by section 75 of the Taxation (Residential Land Withholding Tax, GST on Online Services, and Student Loans) Act 2016 (2016 No 21).