Goods and Services Tax Act 1985

Transitional provisions

88: Valuation: non-profit body making certain supplies, deregistering, or acquiring certain assets of non-profit body

You could also call this:

"Rules for non-profit groups to value things they supply or buy"

Illustration for Goods and Services Tax Act 1985

If you are a non-profit body in New Zealand, there are rules about how you value things you supply. You must follow the tax position you took in your return for the taxable period. You cannot change your tax position after 15 May 2018. If you are deregistered, you can make an election about the value of goods and services you supply.

When you make this election, you can choose to value each supply based on certain costs. These costs include amounts that affect your input tax and are part of the cost of the asset. You can also include operating costs of the asset over the past 7 years.

To make this election, you need to notify the Commissioner in a way they accept. You must do this when you provide your return for the taxable period that includes the supply date. If you buy second-hand goods from a non-profit body, your input tax may be limited.

This limit applies if the original owner made an election about the output tax on the supply. The supply to you must happen less than 5 years after the original owner's supply. In this case, your input tax cannot be more than the original owner's output tax. The original owner or their associate must provide details of the output tax if you ask for them.

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This page was last updated on 18 July 2025

View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=LMS176322.

Topics:

Money and consumer rights > Taxes

87: Change of accounting basis: transitional provision for certain local authorities, or

"Local authorities must change how they account for tax payable, with options to spread payments over time."

89: COVID-19-related payments made before commencement of Goods and Services Tax (Grants and Subsidies) Amendment Order 2020, or

"COVID-19 payments made before a law change in 2020"

Part 12Transitional provisions

88Valuation: non-profit body making certain supplies, deregistering, or acquiring certain assets of non-profit body

Subsection (2) applies to a registered person who—
is a non-profit body resident in New Zealand; and
makes in a taxable period a supply in the course or furtherance of an activity that is not a taxable activity; and
before 15 May 2018, makes a return for the taxable period.

The registered person may not, on or after 15 May 2018, take a tax position relating to the supply that differs from the tax position taken in the return for the taxable period.
A person may make an election under subsection (4) if—
the person is deregistered and deemed under section 5(3) to supply goods and services on a date (the supply date) that is on or after 15 May 2018 and before 1 April 2021; and
immediately before the supply date, the person uses the goods and services in the course or furtherance of an activity that is not a taxable activity and section 20(3K) applies to the goods and services.

The registered person may elect under this subsection that the consideration in money for each supply under section 5(3) of an asset is the total of—
each amount, which may be estimated using a method acceptable to the Commissioner if adequate records are not available, that affects under section 20(3K) the calculation of the registered person’s input tax before the supply date and is included in the cost for the registered owner of the asset supplied; and
each amount arising from the asset, which may be estimated using a method acceptable to the Commissioner if adequate records are not available, that affects under section 20(3K) the calculation of the registered person’s input tax before the supply date and is included in the operating costs of the asset in the period of 7 years before the supply date.

A registered person makes an election under subsection (4) by notifying the Commissioner in a way acceptable to the Commissioner—
of the election, and the information required by the Commissioner relating to the election; and
when the registered person provides the return for the taxable period that includes the supply date.

Subsection (7) applies to the amount of input tax for a registered person (the recipient) from a supply of secondhand goods if—
the supply is of an asset formerly held by a non-profit body (the original owner) resident in New Zealand; and
the recipient is—
1. associated with the original owner:
2. a non-profit body:
3. associated with a non-profit body; and
an election under subsection (4) or section 20(3KB) determined the output tax for the original owner on a supply of the asset; and
the supply of the asset to the recipient occurs less than 5 years after the supply of the asset by the original owner.

Despite section 3A(2) and (3), the input tax for the recipient does not exceed the output tax for the original owner on the supply of the asset by the original owner.
A person who is referred to in subsection (6) as the original owner for an asset, or who is an associate of the original owner and has access to the requested information, must provide details of the output tax for the original owner on the supply of the asset if requested by a person who is referred to in subsection (6) as the recipient of the asset.

Notes

Section 88: inserted (with effect on 15 May 2018), on 18 March 2019, by section 306 of the Taxation (Annual Rates for 2018–19, Modernising Tax Administration, and Remedial Matters) Act 2019 (2019 No 5).