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Goods and Services Tax Act 1985

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

21: Adjustments for apportioned supplies

You could also call this:

"Fixing mistakes in tax for goods and services you partly use for business and partly for other things."

Illustration for Goods and Services Tax Act 1985

You are a registered person who needs to check if you have to make any adjustments for the goods or services you supply. You do this at the end of an adjustment period to see if there is a difference in the actual use of the goods or services. You compare this to what you first intended to use them for.

If you are not allowed to make an adjustment, it might be because section 20(3D) applies to you. It could also be because you are a non-resident who has bought goods and either exported them or disposed of them overseas. Another reason might be that you have already made an adjustment for a change in use of the goods or services and have not changed their use since then.

You are also not allowed to make an adjustment if the value of the goods or services is $10,000 or less, or if the difference in use is less than 10 percentage points, unless the adjustment is more than $1,000. You can choose to use a fair and reasonable method to make adjustments if you mainly supply financial services. You can refer to a logbook, as provided for in sections DE 6 to DE 11 of the Income Tax Act 2007, to determine the use of a motor vehicle.

An adjustment happens on the last day of the adjustment period. You can agree on a method with the Commissioner to make adjustments, or use a method agreed by an industry association or published by the Commissioner. In some cases, you can also use section 6(3)(e) or section 91 for the supply.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM83898.

Topics:
Money and consumer rights > TaxesBusiness > Industry rules
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20H: Goods and services tax incurred in making financial services for raising funds, or

"Getting a refund for tax on services that help raise money"

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21A: When adjustments required, or

"When you need to fix mistakes in your tax calculations"

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

21Adjustments for apportioned supplies

  1. A registered person must ascertain at the end of an adjustment period whether an adjustment is required to be made for any percentage difference in a supply of goods or services for the period in relation to the actual use of those goods or services for making taxable supplies.

  2. Despite subsection (1) but subject to subsections (4) and (4B), the person is not permitted to make an adjustment if—

  3. section 20(3D) applies to them:
    1. the person is a non-resident who has incurred input tax as defined in section 3A(1)(b) for goods and who—
      1. exports the goods in or before the adjustment period; and
        1. disposes of the goods overseas in the adjustment period or holds the goods overseas at the end of the adjustment period:
        2. the person has made an adjustment under section 21FB for a change in use of the goods or services and has not changed the use of the goods or services since that change:
          1. the value of the goods or services, excluding GST, is 10,000 or less:
            1. the difference between the percentage intended use on acquisition and the percentage actual use for the relevant adjustment period is less than 10 percentage points, but this paragraph does not apply if the adjustment amounts to more than $1,000:
              1. the difference between the previous actual use calculated for the most recent adjustment period in which an adjustment was made and the percentage actual use for the relevant adjustment period is less than 10 percentage points, but this paragraph does not apply if the adjustment amounts to more than $1,000:
                1. they intend to apply section 6(3)(e) or 91 to the supply.

                  1. An adjustment arises on the last day of the relevant adjustment period.

                  2. For an adjustment to which sections 21A to 21H apply, a registered person who principally makes supplies of financial services may choose to use a fair and reasonable method, as agreed with the Commissioner, for making adjustments in subsequent adjustment periods. For this purpose, the person may include a group of companies.

                  3. A registered person may choose to use, for making adjustments to which sections 21A to 21H apply, a fair and reasonable method of calculating adjustments that is—

                  4. agreed with the Commissioner by the registered person:
                    1. agreed with the Commissioner by an industry association, if the method is intended by the Commissioner and the industry association to be available to a person such as the registered person:
                      1. published by the Commissioner and is available to the person in that publication.

                        1. In determining the extent of percentage actual use and percentage intended use of a motor vehicle, a registered person may refer to a logbook as provided for in sections DE 6 to DE 11 of the Income Tax Act 2007.

                        Notes
                        • Section 21: substituted, on (applying to supplies made on or after 1 April 2011), by section 15(1) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).
                        • Section 21(2): amended (with effect on 18 March 2019), on , by section 223 of the Taxation (Annual Rates for 2024–25, Emergency Response, and Remedial Measures) Act 2025 (2025 No 9).
                        • Section 21(2): amended, on , by section 303 of the Taxation (Annual Rates for 2018–19, Modernising Tax Administration, and Remedial Matters) Act 2019 (2019 No 5).
                        • Section 21(2)(ab): inserted, on , by section 358(1) of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 (2017 No 14).
                        • Section 21(2)(ac): inserted, on , by section 23(1) of the Taxation (Annual Rates for 2021–22, GST, and Remedial Matters) Act 2022 (2022 No 10).
                        • Section 21(2)(b): amended, on , by section 139(1) (and see section 139(6) for application) of the Taxation (Annual Rates for 2022–23, Platform Economy, and Remedial Matters) Act 2023 (2023 No 5).
                        • Section 21(2)(d): amended (with effect on 1 April 2011), on , by section 139(2) (and see section 139(7) for application) of the Taxation (Annual Rates for 2022–23, Platform Economy, and Remedial Matters) Act 2023 (2023 No 5).
                        • Section 21(2)(e): inserted (with effect on 1 April 2011), on , by section 139(3) (and see section 139(7) for application) of the Taxation (Annual Rates for 2022–23, Platform Economy, and Remedial Matters) Act 2023 (2023 No 5).
                        • Section 21(4): replaced, on , by section 139(4) of the Taxation (Annual Rates for 2022–23, Platform Economy, and Remedial Matters) Act 2023 (2023 No 5).
                        • Section 21(4B): replaced, on , by section 139(5) of the Taxation (Annual Rates for 2022–23, Platform Economy, and Remedial Matters) Act 2023 (2023 No 5).
                        • Section 21(5): inserted (with effect on 1 April 2011), on , by section 216 of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).