Goods and Services Tax Act 1985

Returns and payment of tax

19C: Tax payable, or refund, where change in accounting basis

You could also call this:

"Paying tax or getting a refund when you change how you account for tax"

Illustration for Goods and Services Tax Act 1985

If you change the way you account for tax, you may need to pay more tax or get a refund. You must pay any tax you owe by the last day allowed under section 19B(2) for giving details about the change. The amount of tax you pay depends on the type of accounting change you make.

When you change your accounting basis, you use a formula to work out how much tax you need to pay. The formula is usually the difference between two amounts, called a and b. These amounts are based on the tax you have already paid or claimed, as explained in section 20(3).

If the amount of tax you need to pay is negative, the Commissioner will refund you the amount, as stated in section 46. Any previous adjustments you made to your tax when you changed your accounting basis are considered to have been made according to section 20(3).

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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=DLM83461.

Topics:

Money and consumer rights > Taxes

19B: Particulars to be furnished and prepared where change in accounting basis, or

"What to do when you change how you keep track of money for tax purposes"

19D: Invoice basis for supplies over $225,000, or

"Paying tax when you sell goods and services for over $225,000"

Part 3Returns and payment of tax

19CTax payable, or refund, where change in accounting basis

Every registered person whose accounting basis is changed pursuant to section 19, 19A, or 87, as applicable, shall, not later than the last day allowed under section 19B(2) for furnishing particulars in respect of the change, pay to the Commissioner the tax payable (if any) as determined pursuant to this section.
Where a registered person changes from an invoice basis to a payments basis of accounting, the tax payable under subsection (1) shall be an amount determined in accordance with the following formula:
$a − b$

Where:
- a a
  is an amount equal to the aggregate amount of the input tax deducted pursuant to section 20(3) in relation to the amounts due that are required to be shown in the list of creditors required to be prepared by the registered person under section 19B(3)(a)(i); and
- b b
  is an amount equal to the aggregate amount of output tax accounted for pursuant to section 20(3) in relation to the amounts due that are required to be shown in the list of debtors required to be prepared by the registered person under section 19B(3)(a)(ii).
Where a registered person changes from a payments basis to an invoice basis of accounting, the tax payable under subsection (1) shall be an amount determined in accordance with the following formula:
$a − b$

Where:
- a a
  is an amount equal to the aggregate amount of output tax that would have been accounted for pursuant to section 20(3), in relation to the amounts due that are required to be shown in the list of debtors required to be prepared by the registered person under section 19B(3)(a)(ii), if the person had been accounting for tax payable on an invoice basis; and
- b b
  is an amount equal to the aggregate amount of the input tax that would have been deducted pursuant to section 20(3), in relation to the amounts due that are required to be shown in the list of creditors required to be prepared by the registered person under section 19B(3)(a)(i), if the registered person had been accounting for tax payable on an invoice basis.
Where a registered person changes from a hybrid basis to an invoice basis of accounting, the tax payable under subsection (1) shall be an amount determined in accordance with the following formula:
$a − b$

Where:
- a a
  is zero; and
- b b
  is an amount equal to the aggregate amount of input tax that would have been deducted pursuant to section 20(3), in relation to the amounts due that are required to be shown in the list of creditors required to be prepared by the registered person under section 19B(3)(b), if the person had been accounting for tax payable on an invoice basis.
Where a registered person changes from a hybrid basis to a payments basis of accounting, the tax payable under subsection (1) shall be an amount determined in accordance with the following formula:
$a − b$

Where:
- a a
  is zero; and
- b b
  is an amount equal to the aggregate amount of output tax accounted for pursuant to section 20(3) in relation to the amounts due that are required to be shown in the list of debtors required to be prepared by the registered person under section 19B(3)(c).
Where a registered person changes from an invoice basis to a hybrid basis of accounting, the tax payable under subsection (1) shall be an amount determined in accordance with the following formula:
$a − b$

Where:
- a a
  is an amount equal to the aggregate amount of input tax deducted pursuant to section 20(3) in relation to the amounts due that are required to be shown in the list of creditors required to be prepared by the registered person under section 19B(3)(b); and
- b b
  is zero.
Where a registered person changes from a payments basis to a hybrid basis of accounting, the tax payable under subsection (1) shall be an amount determined in accordance with the following formula:
$a − b$

Where:
- a a
  is an amount equal to the aggregate amount of output tax that would have been accounted for pursuant to section 20(3), in relation to the amounts due that are required to be shown in the list of debtors required to be prepared by the registered person under section 19B(3)(c), if the person had been accounting for tax payable on a hybrid basis; and
- b b
  is zero.
Subject to this Act, if, in relation to any particulars required to be furnished by section 19B, the amount determined in accordance with subsection (2) or subsection (3) or subsection (4) or subsection (5) of this section is a negative amount, the amount of that negative amount shall be refunded to the registered person by the Commissioner pursuant to section 46.
For the purposes of this Act, any previous adjustment made to input tax or output tax, as the case may be, when a registered person changed—
from an invoice basis to a payments or a hybrid basis, as the case may be; or
from a payments basis to an invoice or a hybrid basis, as the case may be; or
from a hybrid basis to an invoice or a payments basis, as the case may be,—

section 20(3)

Notes

Section 19C: inserted, on 1 April 1991 (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 19C(1): amended, on 17 July 2013, by section 129 of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52).
Section 19C(2): substituted, on 13 March 1992, by section 6 of the Goods and Services Tax Amendment Act 1992 (1992 No 2).
Section 19C(3): substituted, on 13 March 1992, by section 6 of the Goods and Services Tax Amendment Act 1992 (1992 No 2).
Section 19C(4): substituted, on 13 March 1992, by section 6 of the Goods and Services Tax Amendment Act 1992 (1992 No 2).
Section 19C(5): substituted, on 13 March 1992, by section 6 of the Goods and Services Tax Amendment Act 1992 (1992 No 2).
Section 19C(6): substituted, on 13 March 1992, by section 6 of the Goods and Services Tax Amendment Act 1992 (1992 No 2).
Section 19C(7): substituted, on 13 March 1992, by section 6 of the Goods and Services Tax Amendment Act 1992 (1992 No 2).