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Goods and Services Tax Act 1985

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

25AAA: Corrections of inaccuracies by marketplace operators

You could also call this:

"Fixing mistakes with tax amounts in online marketplaces"

Illustration for Goods and Services Tax Act 1985

When you run an electronic marketplace, you might need to correct mistakes with tax amounts. This happens when you have to give a supplier a flat-rate credit under section 20(3)(de) and you find out the amount is wrong after you've already taken it out. You will need to fix the mistake.

If you took out too much tax, you must pay back the extra amount as output tax. If you didn't take out enough tax, you need to take out the amount that is missing. You have to make these changes for the time period when you found the mistake.

If you've already given the supplier the flat-rate credit, you can use the extra amount to offset another credit you need to give them. When you don't take out enough tax, you must give the missing amount to the supplier under section 8C(3)(b)(ii).

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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=LMS952440.

Topics:
Money and consumer rights > Taxes
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25: Adjustments for inaccuracies, or

"Fixing mistakes in your tax information"

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

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

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

25AAACorrections of inaccuracies by marketplace operators

  1. This section applies when an operator of an electronic marketplace—

  2. is required to deduct input tax for a flat-rate credit to pass on under section 20(3)(de) to an underlying supplier; and
    1. discovers, after having deducted the amount, that the amount is incorrect.

      1. The operator of the electronic marketplace must correct the amount of input tax or output tax, as applicable, as follows:

      2. if the amount of input tax is more than the correct amount, the operator must return an amount of output tax that is equal to the excess input tax:
        1. if the amount of input tax is less than the correct amount, the operator must deduct input tax of an amount equal to the deficiency in the input tax.

          1. The adjustments referred to in subsection (2)(a) and (b) must be made for the taxable period in which the inaccuracy is discovered.

          2. For the purposes of subsection (2)(a), if the requirement to pass on the flat-rate credit to the underlying supplier has been met, the amount of the excess may be offset in relation to another amount of flat-rate credit required to be passed on.

          3. The operator of the electronic marketplace must pass on any amount of the deficiency referred to in subsection (2)(b) to the underlying supplier under section 8C(3)(b)(ii).

          Notes
          • Section 25AAA: inserted, on , by section 145B of the Taxation (Annual Rates for 2022–23, Platform Economy, and Remedial Matters) Act 2023 (2023 No 5).