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Goods and Services Tax Act 1985

Returns and payment of tax

19: Accounting basis

You could also call this:

"How you pay tax: when you send an invoice or when you get paid"

Illustration for Goods and Services Tax Act 1985

When you are registered for tax, you usually account for tax payable on an invoice basis for the purpose of section 20. This means you pay tax when you send an invoice. You do this unless sections 19A to 19DB say otherwise.

If the Commissioner registers you as a non-resident, you account for tax payable on a payments basis for the purpose of section 20. This means you pay tax when you get paid. The Commissioner can direct you to account for tax payable on a payments basis or a hybrid basis for the purpose of section 20.

You can ask the Commissioner to change your accounting basis. The Commissioner can agree to this if you meet certain requirements, such as those in section 19A(1). The Commissioner's direction will apply from a certain date, such as the start of your next taxable period.

There are some exceptions, such as when you are a liquidator, receiver, or administrator, as defined in section 239B of the Companies Act 1993. In these cases, you cannot change your accounting basis to an invoice basis. The Commissioner can also agree with you to change your accounting basis from a certain date that they think is fair.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM83446.

Topics:
Money and consumer rights > Taxes
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19A: Requirements for accounting on payments basis, or

"When you can do your tax returns based on the payments you receive"

Part 3Returns and payment of tax

19Accounting basis

  1. Subject to sections 19A to 19DB, every registered person must account for tax payable on an invoice basis for the purpose of section 20.

  2. Despite subsection (1), if the Commissioner registers a non-resident person under section 54B, the person must account for tax payable on a payments basis for the purpose of section 20.

  3. The Commissioner may, on application in that behalf by a registered person, direct that for the purposes of section 20 the registered person account for tax payable—

  4. on a payments basis, if the registered person satisfies the requirements of section 19A(1); or
    1. on a hybrid basis.

      1. The Commissioner may, on application in that behalf by a registered person who pursuant to a direction of the Commissioner accounts for tax payable on a hybrid basis or a payments basis, direct that the registered person account for tax payable—

      2. on an invoice basis; or
        1. on a hybrid basis; or
          1. on a payments basis, if the registered person satisfies the requirements of section 19A(1).

            1. Despite subsection (3), a liquidator, receiver, or administrator (as defined in section 239B of the Companies Act 1993) of a registered person who accounts for tax payable on a payments basis may not apply to change the registered person's accounting basis to an invoice basis.

            2. Where the Commissioner gives a direction in respect of a registered person's accounting basis under subsection (2) or subsection (3) of this section or under section 19A(2), the registered person shall account for tax payable on the accounting basis directed by the Commissioner with effect from—

            3. the commencement of the taxable period immediately following the taxable period during which the direction is given by the Commissioner, in any case to which paragraph (b) or paragraph (c) does not apply; or
              1. the person's registration under this Act, where the direction is given by the Commissioner before the end of the first taxable period of the person that follows that registration; or
                1. the commencement of such other taxable period as the Commissioner considers equitable, where the Commissioner and the person so agree.

                  Notes
                  • Section 19: substituted, on (applying to allow changes in a registered person's accounting basis in respect of taxable periods commencing on and after 1 April 1991), by section 3(1) of the Goods and Services Tax Amendment Act 1991 (1991 No 11).
                  • Section 19(1): substituted, on (applying on and after 10 October 2000), by section 95(1) of the Taxation (GST and Miscellaneous Provisions) Act 2000 (2000 No 39).
                  • Section 19(1): amended (with effect on 1 April 2024), on , by section 216 of the Taxation (Annual Rates for 2024–25, Emergency Response, and Remedial Measures) Act 2025 (2025 No 9).
                  • Section 19(1B): inserted, on , by section 126 of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52).
                  • Section 19(2): amended, on , by section 187(1) of the Taxation (Transformation: First Phase Simplification and Other Measures) Act 2016 (2016 No 27).
                  • Section 19(3): amended, on , by section 187(2) of the Taxation (Transformation: First Phase Simplification and Other Measures) Act 2016 (2016 No 27).
                  • Section 19(3B): inserted, on (applying in relation to an application for a change to a registered person's accounting basis received on or after that date), by section 213 of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).