3AMeaning of input tax

1. Input tax, in relation to a registered person, means—

2. tax charged under section 8(1) on a supply of goods or services acquired by the person:
3. tax levied under section 12(1) on goods entered for home consumption under the Customs and Excise Act 2018 by the person:
4. an amount determined under subsection (3) after applying subsection (2):
5. an amount equal to the flat-rate credit that an operator of an electronic marketplace or listing intermediary passes on under section 8C(3)(b)(ii) to an underlying supplier.

6. In the case of a supply by way of sale to a registered person of secondhand goods situated in New Zealand, the amount of input tax is determined under subsection (3) if—

7. the supply is not a taxable supply; and
8. the supply is not of goods that—
   1. were acquired before 1 October 1986 by the registered person or by a person who, when acquiring the goods, is an associated person of the registered person; and
   2. have not been owned, on or after 1 October 1986, by a person who, at the time, is not the registered person and not an associated person of the registered person; and
9. the supply is not—
   1. a supply of goods previously supplied to a registered person who has entered them for home consumption under the Customs and Excise Act 2018, whether the person is registered at the time they enter the goods for home consumption or later; and
   2. a supply of goods made by a non-resident, whether or not they made the earlier supply referred to in subparagraph (i); and
10. the goods acquired by the person for making taxable supplies are either—
    1. not charged with tax at the rate of 0% under section 11A(1)(q) or (r); or
    2. charged with tax at the rate of 0% under section 11A(1)(q) or (r) and, before the acquisition, have never been owned or used by the person or an associated person.

11. The amount of input tax is—

12. if the supplier and the recipient are associated persons, the lesser of—
    1. the tax fraction of the original purchase price of the goods when they were received by the supplier or, if subsection (3BB) applies, the tax fraction given by subsection (3BB); and
    3. the tax fraction of the purchase price; and
    4. the tax fraction of the open market value of the supply; or
13. if the supplier and the recipient are associated persons and the supplier is deemed to have made a supply of the goods under section 5(3) that has been valued under section 10(7A), the lesser of—
    1. the tax fraction of the open market value of the deemed supply under section 5(3); and
    2. the tax fraction of the purchase price; and
    3. the tax fraction of the open market value of the supply; or
14. if the supplier and the recipient are associated persons and the supplier is deemed to have made a supply of the goods under section 5(3) that has been valued under section 10(8), the lesser of—
    1. the tax fraction of the valuation under section 10(8) of the deemed supply under section 5(3); and
    2. the tax fraction of the purchase price; and
    3. the tax fraction of the open market value of the supply; or
15. if the supplier and the recipient are not associated persons and the supply is not the only matter to which the consideration relates, the lesser of—
    1. the tax fraction of the purchase price; and
    2. the tax fraction of the open market value of the supply; or
16. in all other cases, the tax fraction of the consideration in money for the supply.

17. Despite subsection (3)(a), if a supply wholly or partly consists of land, and is part of an arrangement involving more than 2 associated parties and more than 1 supply, the amount of input tax for the supply must not be more than the amount accounted for as output tax for all supplies that are part of the arrangement.

18. For the purposes of subsection (3)(a)(i), if the supplier received the goods from an associated person, the amount of input tax for the recipient is,—

19. to the extent to which paragraph (b) does not apply, the tax fraction of the purchase price of the goods when they were last supplied by a person who is not associated with the supplier; or
20. if, after the supply referred to in paragraph (a) but before the supply referred to in subsection (2), the goods were supplied by a registered person (person A) associated with the supplier and all or part of the supply made by person A was a taxable supply, the amount of output tax accounted for by person A that relates to the taxable supply.

21. For a supply of goods or services meeting the requirements of section 21B(1)(a)(i) and (b), when the goods or services have been acquired from an associated person, the amount of input tax must not be more than the amount accounted for as output tax by the supplier of the goods or services.

22. Repealed

23. Repealed

24. For the purpose of subsection (3), tax fraction means the tax fraction that applies at the time of supply.