Plain language law

New Zealand law explained for everyone

Goods and Services Tax Act 1985

Returns and payment of tax - Calculation of tax payable: deductions, apportionment, other adjustments

20A: Goods and services tax incurred relating to determination of liability to tax

You could also call this:

"Claiming expenses when working out your goods and services tax"

Illustration for Goods and Services Tax Act 1985

When you are working out how much goods and services tax you need to pay, you can claim some expenses back. You can claim expenses for things like calculating your taxable income or working out how much goods and services tax you need to pay. The Commissioner will let you claim these expenses if they are related to your taxable activity.

If you get money back for these expenses, it is considered part of your taxable activity. You will need to pay goods and services tax on this money.

There are some exceptions to this rule, such as if you did something fraudulent or tried to mislead the Commissioner. In these cases, you will not be able to claim the expenses back. The rules about what you can and cannot claim are explained in the Tax Administration Act 1994 and the Income Tax Act 2007.

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 It might be out of date or be missing some parts.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=DLM83849.

Topics:
Money and consumer rights > Taxes
Previous

20: Calculation of tax payable, or

"How to work out the tax you need to pay for your business"

Next

20B: Allocation of taxable supplies following investigation by Commissioner, or

"What happens when the tax office checks and finds mistakes in a business's tax returns"

Part 3Returns and payment of tax
Calculation of tax payable: deductions, apportionment, other adjustments

20AGoods and services tax incurred relating to determination of liability to tax

  1. For the purposes of this section,—

    goods and services tax payable—

    1. means an amount of goods and services tax calculated in accordance with sections 19 to 20; and
      1. includes—
        1. any amount referred to in section 17(2) or section 51B; and
          1. any amount refundable by the Commissioner pursuant to section 19C or section 20

          taxable income, tax year and taxpayer have the same meanings as in section YA 1 of the Income Tax Act 2007.

          1. Subject to this section, any goods and services acquired by the registered person in connection with—

          2. the calculation of the taxable income of the registered person for any tax year:
            1. the calculation or determination of the goods and services tax payable by the registered person for any taxable period:
              1. the preparation, institution, or presentation of an objection or challenge to or an appeal against or in consequence of any determination or assessment made, in respect of the registered person, by the Commissioner under the provisions of the Tax Administration Act 1994 or this Act:
                1. any contribution by the registered person towards the expenditure incurred by any other taxpayer or registered person, as the case may be, where—
                  1. if the expenditure were incurred by the first-mentioned registered person, it would be an allowable deduction in calculating the taxable income of that person or allowable in the calculation or determination of any goods and services tax payable by that person; and
                    1. the first-mentioned registered person has objected to, or challenged or appealed against, an assessment or determination made in relation to the matter by the Commissioner under the provisions of the Income Tax Act 1976 or the Tax Administration Act 1994 or this Act,—
                      2. shall be deemed to be goods and services acquired by the registered person for making taxable supplies; and the Commissioner shall allow that person to make a deduction under section 20(3) of the tax charged thereon.

                    2. This section shall not apply in relation to any goods and services acquired by the registered person in connection with—

                    3. any matter or assessment arising from a return (being a return of income furnished under the provisions of the Income Tax Act 1976 or the Tax Administration Act 1994 or a return furnished under the provisions of this Act) that, in the opinion of the Commissioner, was fraudulent or wilfully misleading:
                      1. any offence under any of the Inland Revenue Acts:
                        1. any assessment of penal tax under the Income Tax Act 1976 or the Tax Administration Act 1994 or this Act (not being an assessment which is subsequently cancelled):
                          1. any assessment of a shortfall penalty under the Tax Administration Act 1994 (not being an assessment which is subsequently cancelled):
                            1. any objection or challenge or appeal which, in the opinion of the Commissioner, is of an inconsequential or frivolous nature.

                              1. Any amount received by the registered person at any time, whether by way of reimbursement, award of the court, recovery, or otherwise howsoever in respect of goods and services deemed under this section to be acquired by the registered person with the intention of using the supply for making taxable supplies, shall be deemed to be supplied by that registered person in the course of a taxable activity in the taxable period in which it is received.

                              Notes
                              • Section 20A: inserted, on (applying to supplies made on or after 24 March 1988), by section 11(1) of the Goods and Services Tax Amendment Act 1988 (1988 No 7).
                              • Section 20A(1) assessable income, income year, and taxpayer: repealed, on (applying to the 1997–98 and subsequent income years), by section 484 of the Taxation (Core Provisions) Act 1996 (1996 No 67).
                              • Section 20A(1) goods and services tax payable paragraph (a): amended, on , by section 5(1)(a) of the Goods and Services Tax Amendment Act 1991 (1991 No 11).
                              • Section 20A(1) goods and services tax payable paragraph (b): amended, on (applying for taxable periods beginning on or after 1 April 2005), by section 150(1) of the Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 (2004 No 111).
                              • Section 20A(1) goods and services tax payable paragraph (b)(ii): amended, on , by section 5(1)(b) of the Goods and Services Tax Amendment Act 1991 (1991 No 11).
                              • Section 20A(1) taxable income, income year and taxpayer: inserted, on (applying to the 1997–98 and subsequent income years), by section 484 of the Taxation (Core Provisions) Act 1996 (1996 No 67).
                              • Section 20A(1) taxable income, tax year and taxpayer: 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 20A(1) taxable income, tax year and taxpayer: 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 20A(2): amended (with effect on 1 April 2011), on , by section 215 of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).
                              • Section 20A(2)(a): 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 20A(2)(a): amended, on (applying to the 1997–98 and subsequent income years), by section 484 of the Taxation (Core Provisions) Act 1996 (1996 No 67).
                              • Section 20A(2)(c): amended, on (applying with respect to tax obligations, liabilities, and rights that are to be performed under or arise in relation to supplies made in respect of taxable periods commencing on or after 1 April 1997 (unless necessary for the enforcement of other provisions in this Act)), by section 3(1)(a) of the Goods and Services Tax Amendment Act 1996 (1996 No 59).
                              • Section 20A(2)(c): amended, on (applying to the 1997–98 and subsequent income years), by section 484 of the Taxation (Core Provisions) Act 1996 (1996 No 67).
                              • Section 20A(2)(d)(i): substituted, on (applying to the 1997–98 and subsequent income years), by section 484 of the Taxation (Core Provisions) Act 1996 (1996 No 67).
                              • Section 20A(2)(d)(ii): amended, on (applying with respect to tax obligations, liabilities, and rights that are to be performed under or arise in relation to supplies made in respect of taxable periods commencing on or after 1 April 1997 (unless necessary for the enforcement of other provisions in this Act)), by section 3(1)(b) of the Goods and Services Tax Amendment Act 1996 (1996 No 59).
                              • Section 20A(2)(d)(ii): amended, on (applying to the 1997–98 and subsequent income years), by section 484 of the Taxation (Core Provisions) Act 1996 (1996 No 67).
                              • Section 20A(3)(a): amended, on (applying to the 1997–98 and subsequent income years), by section 484 of the Taxation (Core Provisions) Act 1996 (1996 No 67).
                              • Section 20A(3)(c): amended, on (applying to the 1997–98 and subsequent income years), by section 484 of the Taxation (Core Provisions) Act 1996 (1996 No 67).
                              • Section 20A(3)(ca): inserted, on (applying with respect to tax obligations, liabilities, and rights that are to be performed under or arise in relation to supplies made in respect of taxable periods commencing on or after 1 April 1997 (unless necessary for the enforcement of other provisions in this Act)), by section 3(2) of the Goods and Services Tax Amendment Act 1996 (1996 No 59).
                              • Section 20A(3)(d): amended, on (applying with respect to tax obligations, liabilities, and rights that are to be performed under or arise in relation to supplies made in respect of taxable periods commencing on or after 1 April 1997 (unless necessary for the enforcement of other provisions in this Act)), by section 3(3) of the Goods and Services Tax Amendment Act 1996 (1996 No 59).
                              • Section 20A(4): amended (with effect on 1 April 2011), on , by section 302 of the Taxation (Annual Rates for 2018–19, Modernising Tax Administration, and Remedial Matters) Act 2019 (2019 No 5).