Plain language law

New Zealand law explained for everyone

Goods and Services Tax Act 1985

Interpretation

6: Meaning of term taxable activity

You could also call this:

"What is a taxable activity, like a business or job, and how does it work?"

Illustration for Goods and Services Tax Act 1985

When you do something to supply goods and services to others, it is called a taxable activity. You do this activity to get something in return, like money. It can be a business, a job, or a hobby. If you start or stop a taxable activity, it is still considered part of that activity. But some things are not taxable activities, like doing something just for fun. If you are paid to do a job, that is not a taxable activity either. There are some exceptions, like if you are a director of a company or a member of a local authority. In some cases, you might need to pay tax on the money you get for doing a job. You can also choose not to make an activity taxable if you follow some rules, like not using the goods for business. You should look at the Local Government (Water Services) Act 2025 for more information about water organisations. You can also look at the Governor-General Act 2010 for more information about public authorities.

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 It might be out of date or be missing some parts.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

View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM82290.

Topics:
Money and consumer rights > TaxesBusiness > Starting a businessBusiness > Industry rules
Previous

5B: Supply of certain imported goods and services, or

"Buying things from overseas is like selling them yourself, according to the law."

Next

7: Act to bind Crown, or

"The government must follow this law too"

Part 1Interpretation

6Meaning of term taxable activity

  1. For the purposes of this Act, the term taxable activity means—

  2. any activity which is carried on continuously or regularly by any person, whether or not for a pecuniary profit, and involves or is intended to involve, in whole or in part, the supply of goods and services to any other person for a consideration; and includes any such activity carried on in the form of a business, trade, manufacture, profession, vocation, association, or club:
    1. without limiting the generality of paragraph (a), the activities of any—
      1. local authority; or
        1. public authority; or
          1. public purpose Crown-controlled company; or
            1. water organisation under the Local Government (Water Services) Act 2025.

            2. Anything done in connection with the beginning or ending, including a premature ending, of a taxable activity is treated as being carried out in the course or furtherance of the taxable activity.

            3. Notwithstanding anything in subsections (1) and (2), for the purposes of this Act the term taxable activity shall not include, in relation to any person,—

            4. being a natural person, any activity carried on essentially as a private recreational pursuit or hobby; or
              1. not being a natural person, any activity which, if it were carried on by a natural person, would be carried on essentially as a private recreational pursuit or hobby; or
                1. any engagement, occupation, or employment under any contract of service or as a director of a company, subject to subsection (4); or:
                  1. any engagement, occupation, or employment—
                    1. pursuant to Part 4 of the Parliament Act 2025 or the Governor-General Act 2010:
                      1. as a Judge, Solicitor-General, Controller and Auditor-General, or Ombudsman:
                        1. pursuant to an appointment made by the Governor-General or the Governor-General in Council and evidenced by a warrant or by an Order in Council or by a notice published in the Gazette in accordance with section 2(2) of the Official Appointments and Documents Act 1919, subject to subsection (4):
                          1. as a Chairman or member of any local authority or any board, council, committee, or other body, subject to subsection (4); or
                          2. any activity to the extent to which the activity involves the making of exempt supplies; or
                            1. an activity involving the supply of goods, including a deemed supply under section 5(3), that a registered person has elected is not a taxable activity, provided—
                              1. the person has not previously claimed a deduction under section 20(3) for the supply of goods before the goods are sold; and
                                1. the goods were not acquired for the principal purpose of making taxable supplies; and
                                  1. the goods were not used for the principal purpose of making taxable supplies; and
                                    1. the goods were not acquired as zero-rated supplies under section 11(1)(m) or (mb), unless the person has chosen to return the nominal GST component as output tax under section 20(3J)(a)(iv).

                                    2. Despite subsection (3)(b), (c)(iia), and (c)(iii), if a director, member, or other person referred to in those paragraphs is paid a fee or another amount in relation to their engagement, occupation, or employment in circumstances in which they are required to account for the payment to their employer, the payment is treated as consideration for a supply of services by the employer to the person who made the payment to the director, member, or other person.

                                    3. For the purposes of subsection (3)(b) and (c)(iii), if a person in carrying on a taxable activity, accepts an office, any services supplied by that person as holder of that office are deemed to be supplied in the course or furtherance of that taxable activity.

                                    Notes
                                    • Section 6(1)(b): replaced, on , by section 30(1) (and see section 30(2) for application) of the Local Government (Water Services) (Repeals and Amendments) Act 2025 (2025 No 43).
                                    • Section 6(2): substituted, on (applying on and after 10 October 2000), by section 87(1) of the Taxation (GST and Miscellaneous Provisions) Act 2000 (2000 No 39).
                                    • Section 6(3)(a): amended (with effect on 3 December 1985), on (applying to supplies made on or after 24 March 1988), by section 5(1) of the Goods and Services Tax Amendment Act 1988 (1988 No 7).
                                    • Section 6(3)(aa): inserted (with effect on 3 December 1985), on (applying to supplies made on or after 24 March 1988), by section 5(2) of the Goods and Services Tax Amendment Act 1988 (1988 No 7).
                                    • Section 6(3)(b): amended, on , by section 187(1)(a) of the Taxation (Annual Rates, Employee Allowances, and Remedial Matters) Act 2014 (2014 No 39).
                                    • Section 6(3)(b) proviso: repealed, on , by section 187(1)(b) of the Taxation (Annual Rates, Employee Allowances, and Remedial Matters) Act 2014 (2014 No 39).
                                    • Section 6(3)(c)(i): amended, on , by section 51 of the Parliament (Repeals and Amendments) Act 2025 (2025 No 63).
                                    • Section 6(3)(c)(i): amended, on , by section 21(2) of the Governor-General Act 2010 (2010 No 122).
                                    • Section 6(3)(c)(iia): inserted (with effect on 3 December 1985), on (applying to supplies made on or after 24 March 1988), by section 5(3) of the Goods and Services Tax Amendment Act 1988 (1988 No 7).
                                    • Section 6(3)(c)(iia): amended, on , by section 207(1) of the Taxation (Annual Rates for 2024–25, Emergency Response, and Remedial Measures) Act 2025 (2025 No 9).
                                    • Section 6(3)(c)(iii): amended, on , by section 9 of the Taxation (Annual Rates for 2021–22, GST, and Remedial Matters) Act 2022 (2022 No 10).
                                    • Section 6(3)(c)(iii): amended, on , by section 187(2) of the Taxation (Annual Rates, Employee Allowances, and Remedial Matters) Act 2014 (2014 No 39).
                                    • Section 6(3)(e): inserted (with effect on 1 April 2011), on , by section 125(1) (and see section 125(3) for application) of the Taxation (Annual Rates for 2022–23, Platform Economy, and Remedial Matters) Act 2023 (2023 No 5).
                                    • Section 6(3)(e): amended (with effect on 1 April 2011), on , by section 207(2) (and see section 207(4) for application) of the Taxation (Annual Rates for 2024–25, Emergency Response, and Remedial Measures) Act 2025 (2025 No 9).
                                    • Section 6(3)(e)(iv): amended, on , by section 125(2) (and see section 125(4) for application) of the Taxation (Annual Rates for 2022–23, Platform Economy, and Remedial Matters) Act 2023 (2023 No 5).
                                    • Section 6(4): inserted, on , by section 187(3) of the Taxation (Annual Rates, Employee Allowances, and Remedial Matters) Act 2014 (2014 No 39).
                                    • Section 6(4): amended, on , by section 207(3) of the Taxation (Annual Rates for 2024–25, Emergency Response, and Remedial Measures) Act 2025 (2025 No 9).
                                    • Section 6(5): inserted, on , by section 187(3) of the Taxation (Annual Rates, Employee Allowances, and Remedial Matters) Act 2014 (2014 No 39).
                                    • Section 6(5): amended, on , by section 348 of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 (2017 No 14).