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Goods and Services Tax Act 1985

Returns and payment of tax

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

You could also call this:

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

Illustration for Goods and Services Tax Act 1985

If you are a registered person and you sell goods and services for more than $225,000, you must account for tax payable on an invoice basis for that sale. This means you pay tax when you send the invoice, not when you get paid. You can find out more about what a short term agreement is in section YA 1 of the Income Tax Act 2007, but you have to read it as if it says "on or before the day that is 1 year" instead of "93rd day".

If you are a non-profit body, you do not have to account for tax payable on an invoice basis if the person buying from you is not a registered person and is not going to use the goods and services for business. You also do not have to account for tax payable on an invoice basis if the person buying from you is going to use the goods and services for business, but only after they have paid you in full.

The Commissioner can treat you as having made a sale of more than $225,000 if you make multiple sales that add up to more than $225,000, and the Commissioner thinks you did this to avoid paying tax on an invoice basis.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM83476.

Topics:
Money and consumer rights > TaxesMoney and consumer rights > Banking and loans
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"Paying tax or getting a refund when you change how you account for tax"

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"A special tax rule for people who rent out homes through websites"

Part 3Returns and payment of tax

19DInvoice basis for supplies over $225,000

  1. A registered person who makes a supply of goods and services for a consideration of more than $225,000 must account for tax payable on an invoice basis for that supply.

  2. Subsection (1) does not apply if the supply of goods and services is a short term agreement for the sale and purchase of property or services, as that term is defined in section YA 1 of the Income Tax Act 2007, except that the reference to 93rd day is to be read as on or before the day that is 1 year.

  3. Subsection (1) does not apply if the supplier is a non-profit body that determines on the basis of reasonable information that, at the time of supply, the recipient—

  4. is not a registered person; and
    1. is either—
      1. not intending to use the goods and services for the purposes of carrying on a taxable activity; or
        1. intending to use the goods and services for the purposes of carrying on a taxable activity but only after the full consideration for the supply is paid to the supplier.

        2. For the purpose of subsection (1), the Commissioner may treat a registered person as having made a supply of goods and services for a consideration of more than $225,000 if—

        3. the person has made more than 1 supply and the sum of the consideration for each supply is more than $225,000 irrespective of whether each supply is one to which subsection (2) applies; and
          1. the Commissioner considers that the person made more than 1 supply to avoid the application of subsection (1).

            Notes
            • Section 19D: inserted, on (applying on and after 10 October 2000), by section 98(1) of the Taxation (GST and Miscellaneous Provisions) Act 2000 (2000 No 39).
            • Section 19D(2): amended, on (effective for 2008–09 income year and later income years, except when the context requires otherwise), by section ZA 2(1) of the Income Tax Act 2007 (2007 No 97).
            • Section 19D(2): amended, on (effective for 2005–06 tax year and later tax years, except when the context requires otherwise), by section YA 2 of the Income Tax Act 2004 (2004 No 35).
            • Section 19D(2B): inserted, on , by section 13 of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).