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Goods and Services Tax Act 1985

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

25AA: Consequences of change in contract for imported goods and services

You could also call this:

"What happens with your tax if something changes with goods or services you bought from overseas"

Illustration for Goods and Services Tax Act 1985

If you buy goods or services from someone outside New Zealand, and something changes with your contract, you might need to adjust your tax. This can happen if the supply is cancelled, or if the goods or services are different from what you originally agreed on. It can also happen if you get a discount, or if you return some of the goods or services.

If you made a mistake with your tax return, you will need to fix it in your next return. You do this by adjusting the amount of tax you owe. If you paid too little tax, you will need to pay the difference. If you paid too much tax, you can claim the difference back as a deduction, under section 20(3).

You must make these adjustments when you realise the mistake was made. This means you will need to check your tax returns carefully to make sure everything is correct. If the amount of tax you should have paid is different from what you actually paid, you will need to adjust your return accordingly.

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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=DLM84314.

Topics:
Money and consumer rights > TaxesMoney and consumer rights > Consumer protection
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Part 3Returns and payment of tax
Calculation of tax payable: deductions, apportionment, other adjustments

25AAConsequences of change in contract for imported goods and services

  1. Despite section 25, this section applies in relation to a supply of goods or services by a non-resident that is treated by sections 5B and 8(4B) as being made in New Zealand by the recipient of the supply if—

  2. any one of the following is satisfied:
    1. the supply of goods or services has been cancelled:
      1. the nature of the supply of goods or services has been fundamentally varied or altered:
        1. the previously agreed consideration for the supply of goods or services has been altered, whether due to the offer of a discount or otherwise:
          1. the goods or services or part of the goods or services supplied have been returned to the non-resident:
            1. the supplier has provided the recipient with taxable supply information under section 19K(8) or (9); and
            2. an incorrect return has been made for the taxable period for which output tax on the supply is attributable.

              1. A person who has accounted for an incorrect amount of output tax must make an adjustment to the calculation of tax payable in the return for the taxable period in which it becomes apparent that the amount of output tax was incorrect, and if the output tax properly charged on the supply is—

              2. more than the output tax actually accounted for by the person, the amount of the excess is treated as being tax charged in relation to a taxable supply made by the person:
                1. less than the output tax actually accounted for by the person, the amount of the deficiency is a deduction under section 20(3) for the person.

                  1. A person who has accounted for an incorrect amount of deductions must make an adjustment to the calculation of tax payable in the return for the taxable period in which it becomes apparent that the amount of deductions was incorrect, and if the deduction properly resulting from the supply is—

                  2. less than the deduction actually claimed by the person, the amount of the deficiency is treated as being tax charged in relation to a taxable supply made by the person:
                    1. more than the deduction actually claimed by the person, the amount of the excess is a deduction under section 20(3) for the person.

                      Notes
                      • Section 25AA: inserted, on , by section 160 of the Taxation (GST, Trans-Tasman Imputation and Miscellaneous Provisions) Act 2003 (2003 No 122).
                      • Section 25AA heading: amended, on , by section 29(1) of the Taxation (Annual Rates for 2019–20, GST Offshore Supplier Registration, and Remedial Matters) Act 2019 (2019 No 33).
                      • Section 25AA(1): amended, on , by section 29(2) of the Taxation (Annual Rates for 2019–20, GST Offshore Supplier Registration, and Remedial Matters) Act 2019 (2019 No 33).
                      • Section 25AA(1)(a)(i): amended, on , by section 29(3) of the Taxation (Annual Rates for 2019–20, GST Offshore Supplier Registration, and Remedial Matters) Act 2019 (2019 No 33).
                      • Section 25AA(1)(a)(ii): amended, on , by section 29(3) of the Taxation (Annual Rates for 2019–20, GST Offshore Supplier Registration, and Remedial Matters) Act 2019 (2019 No 33).
                      • Section 25AA(1)(a)(iii): amended, on , by section 29(3) of the Taxation (Annual Rates for 2019–20, GST Offshore Supplier Registration, and Remedial Matters) Act 2019 (2019 No 33).
                      • Section 25AA(1)(a)(iv): amended, on , by section 29(3) of the Taxation (Annual Rates for 2019–20, GST Offshore Supplier Registration, and Remedial Matters) Act 2019 (2019 No 33).
                      • Section 25AA(1)(a)(iv): amended, on , by section 65(1) of the Taxation (Residential Land Withholding Tax, GST on Online Services, and Student Loans) Act 2016 (2016 No 21).
                      • Section 25AA(1)(a)(v): inserted, on , by section 65(2) of the Taxation (Residential Land Withholding Tax, GST on Online Services, and Student Loans) Act 2016 (2016 No 21).
                      • Section 25AA(1)(a)(v): amended (with effect on 1 April 2023), on , by section 228 of the Taxation (Annual Rates for 2024–25, Emergency Response, and Remedial Measures) Act 2025 (2025 No 9).
                      • Section 25AA(1)(a)(v): amended, on , by section 32(1) (and see section 32(2) for application) of the Taxation (Annual Rates for 2021–22, GST, and Remedial Matters) Act 2022 (2022 No 10).