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

21D: Calculating amount of adjustment

You could also call this:

"How to work out the amount of tax adjustment you need to pay or get back"

Illustration for Goods and Services Tax Act 1985

When you are working out the amount of adjustment, you use a formula. The formula is the full input tax deduction multiplied by the percentage difference. You can find what full input tax deduction and percentage difference mean in section 20(3J)(a)(i) and section 21G(1)(c).

If the adjustment is positive, you might be able to get an extra deduction under section 20(3)(e) or (hb). If the adjustment is negative, you have to treat it as output tax and attribute it to a taxable period under section 20(4). This means you have to pay tax on it.

You work out the adjustment for a certain period of time, and it can be either positive or negative. You use the formula to calculate the amount of the adjustment. The formula helps you figure out how much tax you need to pay or get back.

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 It might be out of date or be missing some parts.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=DLM83936.

Topics:
Money and consumer rights > Taxes
Previous

21CB: Rate for change of use before 1 October 2010, or

"Old rules for changing how something is used before 1 October 2010"

Next

21E: Concurrent uses of land, or

"Using land for different things at the same time and working out GST"

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

21DCalculating amount of adjustment

  1. If a percentage difference arises for an adjustment period, a registered person must make a positive or negative adjustment for the period of an amount calculated using the formula—

    full input tax deduction × percentage difference.

    Where:

    • In the formula,—

    • full input tax deduction is the total amount of input tax on the supply, including any nominal GST component chargeable under section 20(3J)(a)(i):
      1. percentage difference has the meaning set out in section 21G(1)(c).

        1. For the purposes of subsection (1)—

        2. if the adjustment is positive and the percentage actual use is more than the person's percentage intended use or previous actual use, as applicable, the person is entitled to an additional deduction under section 20(3)(e) or (hb), as applicable:
          1. if the adjustment is negative and the percentage actual taxable use is less than the person's percentage intended use or previous actual use, as applicable, the person must treat the amount as a positive amount of output tax and attribute it to a taxable period under section 20(4).

            Notes
            • Section 21D: 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 21D(3): amended, on , by section 141 of the Taxation (Annual Rates for 2022–23, Platform Economy, and Remedial Matters) Act 2023 (2023 No 5).
            • Section 21D(3): amended (with effect on 1 April 2013, applying in relation to supplies of goods other than land or improvements to land made on or after 1 April 2014; for supplies of land or improvements to land, applying from 17 July 2013), on , by section 133(1) of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52).
            • Section 21D(3)(a): amended (with effect on 1 April 2013, applying in relation to supplies of goods other than land or improvements to land made on or after 1 April 2014; for supplies of land or improvements to land, applying from 17 July 2013), on , by section 133(2) of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52).
            • Section 21D(3)(b): amended, on , by section 359 of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 (2017 No 14).