Goods and Services Tax Act 1985

Interpretation

4: Meaning of term open market value

You could also call this:

"What "open market value" means: the price people normally pay for something in New Zealand"

Illustration for Goods and Services Tax Act 1985

When you hear the term "open market value", it refers to the amount of money someone would pay for a supply of goods and services in New Zealand. You need to consider what people would normally pay for something like it, at the same time, and in similar circumstances. The open market value includes any goods and services tax charged under section 8(1).

If you cannot find out the open market value in the normal way, you look at what someone would pay for a similar supply of goods and services. This similar supply must be freely offered and made between people who are not associated with each other. You consider what people would normally pay for something like it, at the same time, and in similar circumstances.

If you still cannot find out the open market value, it will be determined using a method approved by the Commissioner. This method gives a fair idea of what you could get for the supply of goods and services. The Commissioner's method is used when you cannot find out the open market value in any other way.

When you get something that is not money for a supply of goods and services, you work out its open market value in a similar way. You use the same rules as for supplies of goods and services, but you might need to make some adjustments. This helps you find out what the thing you got is worth in money.

This text is automatically generated. It might be out of date or be missing some parts. Find out more about how we do this.

This page was last updated on 18 July 2025

View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM81873.

Topics:

Money and consumer rights > TaxesBusiness > Fair trading

3A: Meaning of input tax, or

"What input tax means: tax you pay on goods or services you buy for your business"

4B: Meaning of distantly taxable goods, or

"What are distantly taxable goods when you buy things from overseas?"

Part 1Interpretation

4Meaning of term open market value

For the purposes of this section—
the term similar supply, in relation to a supply of goods and services, means any other supply of goods and services that, in respect of the characteristics, quality, quantity, functional components, materials, and reputation of the goods and services first mentioned, is the same as, or closely or substantially resembles, that supply of goods and services:
the open market value of a supply shall include any goods and services tax charged pursuant to section 8(1) on that supply.

For the purposes of this Act, the open market value of any supply of goods and services at any date shall be the consideration in money which the supply of those goods and services would generally fetch if supplied in similar circumstances at that date in New Zealand, being a supply freely offered and made between persons who are not associated persons.
Where the open market value of any supply of goods and services cannot be determined under subsection (2), the open market value shall be the consideration in money which a similar supply would generally fetch if supplied in similar circumstances at that date in New Zealand, being a supply freely offered and made between persons who are not associated persons.
Where the open market value of any supply of goods and services cannot be determined pursuant to subsection (2) or subsection (3), the open market value shall be determined in accordance with a method approved by the Commissioner which provides a sufficiently objective approximation of the consideration in money which could be obtained for that supply of those goods and services.
For the purposes of this Act the open market value of any consideration, not being consideration in money, for a supply of goods and services shall be ascertained in the same manner, with any necessary modifications, as the open market value of any supply of goods and services is ascertained pursuant to the foregoing provisions of this section.

Notes

Section 4(1)(b): substituted (with effect on 3 December 1985), on 8 August 1986, by section 4 of the Goods and Services Tax Amendment Act 1986 (1986 No 43).
Section 4(3): amended, on 24 March 1988 (applying to supplies made on or after 24 March 1988), by section 3 of the Goods and Services Tax Amendment Act 1988 (1988 No 7).