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

21H: Transitional accounting rules

You could also call this:

"Special tax rules for goods and services bought before 1 April 2011"

Illustration for Goods and Services Tax Act 1985

If you acquired goods or services before 1 April 2011, you must follow the old apportionment rules when working out your tax. The old apportionment rules are found in sections 21 to 21H of the Goods and Services Tax Act 1985, as they were before the Taxation (GST and Remedial Matters) Act 2010 came into effect.

You will not be able to make adjustments under the old apportionment rules after certain dates, depending on the value of the goods or services. If the market value or book value of the goods or services on 1 April 2011 was $5,000 or less, you cannot make adjustments after 1 April 2011.

For goods or services worth more than $5,000 but not more than $10,000, you cannot make adjustments after 1 April 2013, and for goods or services worth more than $10,000, you cannot make adjustments after 1 April 2016.

If you acquired goods or services before 1 April 2011 and no adjustment was made under the old apportionment rules before 1 April 2011, you must apply the old apportionment rules or the new apportionment rules, depending on whether you deducted input tax or the goods or services were zero-rated at the time of purchase.

You can find the new apportionment rules in sections 21 to 21G of the Goods and Services Tax Act 1985.

These rules do not apply to supplies that wholly or partly consist of land.

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 It might be out of date or be missing some parts.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=DLM83952.

Topics:
Money and consumer rights > Taxes
Previous

21G: Definitions and requirements for apportioned supplies and adjustment periods, or

"Rules for working out business and personal use of things you buy for your business"

Next

21HB: Transitional rules related to treatment of dwellings, or

"Rules for taxing homes bought or sold between 1986 and 2011"

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

21HTransitional accounting rules

  1. This section applies in relation to goods or services acquired before 1 April 2011 when—

  2. a registered person determines the extent to which goods or services are applied for the purposes of making supplies other than taxable supplies under sections 21 to 21H (the old apportionment rules) as they were before the enactment of the Taxation (GST and Remedial Matters) Act 2010:
    1. no adjustment was made or was required to be made under the old apportionment rules before 1 April 2011 for goods or services other than those referred to in section 21HB.

      1. The person must continue to apply the old apportionment rules in relation to the supply. However, the making of these adjustments is limited as follows:

      2. for goods or services whose market value or book value on 1 April 2011 is $5,000 or less, no adjustment under the old apportionment rules may be, or may be required to be, made after 1 April 2011:
        1. for goods or services whose market value or book value on 1 April 2011 is more than $5,000 but not more than $10,000, no adjustment under the old apportionment rules may be, or may be required to be, made after 1 April 2013:
          1. for other goods or services, no adjustment under the old apportionment rules may be, or may be required to be, made after 1 April 2016.

            1. For goods or services that were acquired before 1 April 2011, for which no adjustment was made or required under the old apportionment rules before 1 April 2011, and that are not referred to in section 21HB(1), this section applies modified as follows:

            2. if input tax was deducted under section 20(3) in relation to the goods or services, or if the goods or services were zero-rated at the time of purchase, the person must apply the old apportionment rules in relation to the supply:
              1. if no input tax was deducted under section 20(3) in relation to the goods or services, the person must apply the new apportionment rules set out in sections 21 to 21G and subsection (2C).

                1. For the purpose of subsection (2B)(b), the first adjustment period is treated as beginning on the date of acquisition of the goods or services and ending on the date that is the first balance date falling after the later of—

                2. the date on which the goods or services were first used for making taxable supplies:
                  1. the date on which the person becomes a registered person.

                    1. Subsection (2)(a) to (c) do not apply to a supply that wholly or partly consists of land.

                    Notes
                    • Section 21H: 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 21H(1): replaced (with effect on 1 April 2011), on , by section 221(1) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).
                    • Section 21H(2B): inserted (with effect on 1 April 2011), on , by section 221(2) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).
                    • Section 21H(2C): inserted (with effect on 1 April 2011), on , by section 221(2) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).