Plain language law

New Zealand law explained for everyone

Goods and Services Tax Act 1985

Schedule 2: Government grants and subsidies: non-taxable amounts

You could also call this:

"Government help you don't pay tax on"

Illustration for Goods and Services Tax Act 1985

You need to know about government grants and subsidies that are not taxable. These are amounts that the government gives you that you do not have to pay tax on. The rules about these amounts are in the Goods and Services Tax Act 1985. You can get non-taxable amounts from benefits paid under the Social Security Act 2018. You can also get them from payments for your personal use and benefit. Some payments from the New Zealand Agency for International Development are non-taxable too. There are other non-taxable amounts, like tax credits under the Income Tax Act 2007. Earthquake support payments and COVID-19 payments are non-taxable as well. These rules help you understand what government grants and subsidies are not taxable.

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 It might be out of date or be missing some parts.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=LMS1428325.

Topics:
Money and consumer rights > Taxes
Previous

Schedule 1: Non-taxable legislative charges, or

"Charges that don't have tax, like some artwork resale payments"

2Government grants and subsidies: non-taxable amounts Empowered by s 5(6D), (6E)

1General

  1. Clauses 2 to 8 set out the amounts that are, under section 5(6E), excluded from being a payment in the nature of a grant or subsidy for the purposes of section 5(6D).

Notes
  • Schedule 2 clause 1: inserted, on , by section 240 of the Taxation (Annual Rates for 2024–25, Emergency Response, and Remedial Measures) Act 2025 (2025 No 9).

2Benefits

  1. An amount of a benefit paid under the Social Security Act 2018.

Notes
  • Schedule 2 clause 2: inserted, on , by section 240 of the Taxation (Annual Rates for 2024–25, Emergency Response, and Remedial Measures) Act 2025 (2025 No 9).

3Payments for personal use and benefit

  1. An amount paid to a person when the payment is for the personal use and benefit of the person or a relative (as defined in paragraph (a) of the definition of that term in section YA 1 of the Income Tax Act 2007) of the person.

Notes
  • Schedule 2 clause 3: inserted, on , by section 240 of the Taxation (Annual Rates for 2024–25, Emergency Response, and Remedial Measures) Act 2025 (2025 No 9).

4Suspensory loans or advances

  1. An amount that is a suspensory loan or advance made on behalf of the Crown or by a public authority before 1 January 1993, other than a suspensory loan or advance that, at the time it was made, was explicitly stated to include the amount of any goods and services tax payable by the person to whom or for whose benefit the loan or advance was made.

Notes
  • Schedule 2 clause 4: inserted, on , by section 240 of the Taxation (Annual Rates for 2024–25, Emergency Response, and Remedial Measures) Act 2025 (2025 No 9).

5Payments made by NZ Agency for International Development

  1. An amount paid by the New Zealand Agency for International Development to a New Zealand organisation to the extent to which, as a condition of the payment, it is—

  2. transferred outside New Zealand; and
    1. transferred to an organisation that is operating outside New Zealand at the time the payment is received by that organisation; and
      1. used to acquire goods or services outside New Zealand.

        Notes
        • Schedule 2 clause 5: inserted, on , by section 240 of the Taxation (Annual Rates for 2024–25, Emergency Response, and Remedial Measures) Act 2025 (2025 No 9).

        6Commissioner’s tax credits

        1. An amount that is a tax credit under the Income Tax Act 2007, the Income Tax Act 2004, or the Tax Administration Act 1994 that the Commissioner credits, transfers, refunds, deals with, or otherwise pays, when the entitlement arises under—

        2. subpart MK of the Income Tax Act 2007 or subpart KJ of the Income Tax Act 2004: or
          1. section LH 2 of the Income Tax Act 2007; or
            1. section MX 4 of the Income Tax Act 2007.

              Notes
              • Schedule 2 clause 6: inserted, on , by section 240 of the Taxation (Annual Rates for 2024–25, Emergency Response, and Remedial Measures) Act 2025 (2025 No 9).

              7Earthquake support payments

              1. An amount that is an earthquake support subsidy payment—

              2. made on or before 30 June 2011 on behalf of the Crown in relation to the Canterbury earthquake aftershock centred in Lyttelton on 22 February 2011; or
                1. made on or before 26 May 2017 on behalf of the Crown in relation to the earthquakes that occurred on 14 November 2016 in Hurunui and Kaikōura or any of their aftershocks.

                  Notes
                  • Schedule 2 clause 7: inserted, on , by section 240 of the Taxation (Annual Rates for 2024–25, Emergency Response, and Remedial Measures) Act 2025 (2025 No 9).

                  8COVID-19 payments

                  1. An amount paid on or after 17 March 2020 by the Ministry of Social Development on behalf of the Crown in relation to—

                  2. wages or other income as a consequence of COVID-19; or
                    1. leave taken as a consequence of COVID-19.

                      Notes
                      • Schedule 2 clause 8: inserted, on , by section 240 of the Taxation (Annual Rates for 2024–25, Emergency Response, and Remedial Measures) Act 2025 (2025 No 9).