10 Value of supply of goods and services

(1)

For the purposes of this Act the following provisions of this section shall apply for determining the value of any supply of goods and services.

(2)

Subject to this section, the value of a supply of goods and services shall be such amount as, with the addition of the tax charged, is equal to the aggregate of,—

(a)

to the extent that the consideration for the supply is consideration in money, the amount of the money:

(b)

to the extent that the consideration for the supply is not consideration in money,—

(i)

the open market value of that consideration, if subparagraph (ii) does not apply; or

(ii)

the value of the consideration agreed by the supplier and the recipient, if subsection (2B) applies.

(2B)

The value of consideration for a supply of goods and services is determined under subsection (2)(b)(ii) if—

(a)

the supply is of a right to receive a specified number of emissions units at a future date; and

(b)

the supplier and recipient are not associated persons; and

(c)

each of the supplier and recipient, in the transaction of which the supply is a part,—

(i)

makes a taxable supply; and

(ii)

acquires a taxable supply for use in making taxable supplies.

(3)

Subject to subsections (3A), (3AB), (3B), (3C), (3D) and (8), the consideration for a supply is treated as being the open market value of the supply if—

(a)

the supply is made by a person for no consideration or for a consideration that is less than the open market value of the supply; and

(b)

the supply is an associated supply; and

(c)

the supply is not a fringe benefit that the supplier has, or is deemed to have, provided or granted under the FBT rules of the Income Tax Act 2007 to the recipient, being a person employed under a contract of service by the supplier.

(3A)

Subsection (3) does not apply to a supply if—

(a)

the recipient acquired the supply for the principal purpose of making taxable supplies; and

(b)

the recipient is entitled to make a deduction under section 20(3) in respect of the supply, or would be entitled to make such a deduction if—

(i)

the amount of the deduction were determined under section 3A(3)(e) instead of under section 3A(3)(a):

(ii)

there were consideration for the supply:

(iii)

the supplier were a registered person who had complied with the requirements of the Act; and

(c)

the supply is not a supply of financial services to which subsection (3B) applies.

(3AB)

Subsection (3) does not apply to a supply of goods and services if the recipient—

(a)

acquires the supply for no consideration; and

(b)

from the time of the supply, applies the goods and services for the purpose of making taxable supplies.

(3B)

If a supply of financial services is charged with tax at a rate of 0% under section 11A(1)(q) or (r) or gives rise to a deduction for the supplier under section 20C

(a)

subsection (3) does not apply to the supply; and

(b)

the consideration for the supply is treated as being the open market value of the supply if—

(i)

the supply is made by a person for consideration that is more than the open market value of the supply; and

(ii)

the supplier and the recipient are associated persons.

(3C)

Subsection (3) does not apply to a supply of services that is treated by section 8(4B) as being made in New Zealand if—

(a)

the amount of the consideration for the supply is a deduction under the Income Tax Act 2007 for the recipient of the supply; or

(b)

the amount of the consideration for the supply would have been a deduction under the Income Tax Act 2007 for the recipient of the supply if the recipient had given any consideration for the supply.

(3D)

Subsection (3) does not apply to a supply of services that is treated by section 8(4B) as being made in New Zealand if—

(a)

the recipient of the supply is a branch or division that is treated by section 56B as being a separate person; and

(b)

the amount of the consideration for the supply would have been a deduction under the Income Tax Act 2007 for the branch or division if—

(i)

the branch or division were entitled to deductions under the Income Tax Act 2007:

(ii)

the branch or division had given any consideration for the supply.

(3E)

The value of a supply of services that is treated by section 8(4B) as being made in New Zealand is the amount that, before the addition of the tax charged, is equal to the amount of the consideration for the supply.

(4)

Where any supply of goods is a supply which would, but for section 11(3) or (3C), be charged with tax at the rate of 0%, the consideration in money for that supply shall be deemed to be an amount equal to the purchase price of those goods to the supplier:

provided that in any case where the deduction of input tax referred to in that proviso has been made by any other person (where that supplier and that other person are associated persons), the consideration in money for that supply shall be deemed to be an amount equal to the purchase price of those goods to that other person:

provided further that for the purposes of this subsection, the purchase price of any goods shall not be reduced by any amount of input tax deducted by the supplier or, as the case may be, any other person where the supplier and that other person are associated persons, pursuant to section 20(3).

(5)

Despite subsection (2), if a supply of goods and services is made under a credit contract, the consideration in money for the supply is treated as being the higher of the cash price of the goods and services and the price the supplier would have charged the purchaser if the purchaser had paid in full at the time the credit contract was entered into.

(5A)

In subsection (5),—

cash price has the same meaning as in section 5 of the Credit Contracts and Consumer Finance Act 2003

credit contract has the same meaning as in section 3 of the Credit Contracts Act 1981 immediately before the repeal of that Act.

(5B)

Despite subsection (5A), a person who is a party to an arrangement that is a credit contract but is not a credit contract under section 7 of the Credit Contracts and Consumer Finance Act 2003 may elect that the arrangement be treated under this section as not being a credit contract in relation to the person.

(5C)

Despite subsection (5A), a person who is a party to an arrangement that is not a credit contract but is a credit contract under section 7 of the Credit Contracts and Consumer Finance Act 2003 may elect that the arrangement be treated under this section as being a credit contract in relation to the person.

(6)

Where and to the extent that any supply of goods and services consists of the supply, to any individual, of domestic goods and services in a commercial dwelling, the value attributable to that part of that supply of domestic goods and services that is for a period in excess of 4 weeks shall be deemed to be reduced to an amount equal to 60% of the amount that would, if that part of that supply were chargeable with tax at the rate of 9%, be the value of that part of that supply of domestic goods and services:

provided that to the extent that any supply is a supply of domestic goods and services, and where that commercial dwelling is a residential establishment, and where the supplier and the recipient have agreed that that supply shall be for a period of or in excess of 4 weeks, or for a number of periods which in the aggregate will exceed 4 weeks, the value attributable to that supply of domestic goods and services shall, from the commencement of that supply, be deemed to be reduced to an amount equal to 60% of the amount that would, if that supply were chargeable with tax at the rate of 9%, be the value of that supply of domestic goods and services.

(7)

If goods and services are treated by section 21I(1) as being supplied by a person, the consideration in money for the supply is—

(a)

an amount equal to the taxable value of the fringe benefit as determined by sections CX 20, and RD 54 to RD 57 of the Income Tax Act 2007, if paragraph (b) does not apply; or

(b)

nil, if the person would not have a deduction under section 20(3) relating to the supply of the fringe benefit if the consideration in money for the supply were given by paragraph (a).

(7A)

If goods and services are deemed to be supplied by a person under section 5(3) or (3B), the consideration in money for the supply is treated as being the open market value of the supply. A supply of common property by a unit title body corporate has a zero value.

(7B)

If goods and services are treated as supplied by a person under section 5(23), the value of the supply is an amount equal to the consideration for the supply first made to the recipient.

(8)

Where goods and services are deemed to be supplied by a person under section 5(3) and the goods and services were acquired before 1 October 1986, the consideration in money for either supply shall be deemed to be the lesser of—

(a)

the cost of those goods and services to the supplier, including any input tax deduction claimed in respect of the supply of those goods and services to that supplier:

(b)

the open market value of that supply.

(9)

Where a supply of services is deemed to be made under the proviso to section 5(5), the consideration in money for the supply shall be deemed to be an amount equal to the amount referred to in paragraph (b) of that proviso as being retained or recoverable.

(10)

Notwithstanding anything in this section, where goods and services are, or are deemed to be, supplied by any public authority pursuant to section 5(6), the value of any such supply shall be an amount equal to any amount that is brought to charge as revenue from the Crown for the supply of outputs by the public authority.

(11)

Notwithstanding anything in this section, where goods and services are, or are deemed to be, supplied to any person by any local authority pursuant to section 5(7), the consideration in money for any such supply shall be an amount equal to any amount from time to time paid or payable by or on behalf of that person for that supply.

(12)

The consideration in money for the supply of services for—

(a)

racing betting or sports betting is treated as the amount received by the New Zealand Racing Board or its agents, plus the net return of bets laid off by the Board less the sum of all refunds and winning dividends; and

(b)

equalisator betting is treated as the amount received by a racing club.

(12A)

[Repealed]

(13)

In subsection (12), equalisator betting, New Zealand Racing Board, racing club, racing betting, and sports betting have the meanings set out in section 5 of the Racing Act 2003.

(14)

If a supply of services is treated as having been made under section 5(10), the consideration for the supply is calculated using the formula—

amounts received − prizes

where—

(a)

amounts received is the total of all amounts in money received in relation to the supply—

(i)

for gambling, by the person, society, licensed promoter, or organiser who under the Gambling Act 2003 conducts the gambling:

(ii)

for a prize competition, by the person who conducts the prize competition:

(b)

prizes is the total amount of all prizes paid and payable in money in relation to the supply, reduced by the total amount of input tax for supplies for which the prizes are treated as being consideration.

(14B)

If a supply of services is treated as having been made under section 5(10B), the consideration for the supply is calculated using the formula—

amounts received from residents − prizes paid to residents.

(14C)

In the formula in subsection (14B),—

(a)

amounts received from residents is the total amount in money received in relation to the supply by the non-resident person who conducts the gambling or the prize competition, as applicable, from all persons resident in New Zealand:

(b)

prizes paid to residents is the total amount of all prizes paid and payable in money to persons resident in New Zealand in relation to the supply.

(14D)

If amounts of consideration calculated under subsection (14B) for all of the non-resident’s supplies of gambling or prize competitions for a taxable period are added together (the total consideration), and the total consideration is a negative amount, then the negative amount may be used to reduce a corresponding positive amount of total consideration for the next taxable period.

(14E)

If, after the use of the negative amount described in subsection (14D), an excess negative amount remains, the excess amount may be used to reduce a positive amount of total consideration in the immediately following taxable period.

(14F)

Subsection (14E) continues to apply until the excess amount is extinguished.

(15)

For the purposes of subsection (14), the terms gambling and New Zealand lottery have the meanings set out in section 4(1) of the Gambling Act 2003.

(15A)

If a supply is treated as having been made under section 5(11B), the consideration in money for the supply (less any amount paid out by the casino as winnings in respect of gambling or for the redemption of chips) must be treated—

(a)

as the amount of money (including cheques not collected) a person pays to the casino to purchase a chip or otherwise to participate in gambling played or conducted at a casino venue; or

(b)

as commission for participation in the gambling.

(15B)

For the purposes of subsection (15A), the terms casino venue, chip, and gambling have the meanings set out in section 4(1) of the Gambling Act 2003.

(15C)

If a non-resident makes a supply of services to a resident who is a member of the same group of companies under section IA 6 of the Income Tax Act 2007 as the supplier, or who is treated by section 56B as being a separate person from the supplier, and the supply is treated by sections 5B and 8(4B) as being made in New Zealand by the recipient of the supply, or section 20(3JC) applies, the value of the supply is determined as if the consideration for the supply did not include—

(a)

the amount of the consideration for the supply that represents salary or wages paid to an employee of—

(i)

the non-resident:

(ii)

a company that is in a wholly-owned group with the non-resident under section IA 6 of the Income Tax Act 2007; and

(b)

the amount of the consideration for the supply that represents interest incurred by—

(i)

the non-resident:

(ii)

a company that is in a wholly-owned group with the non-resident under section IA 6 of the Income Tax Act 2007.

(16)

[Repealed]

(16A)

[Repealed]

(17)

[Repealed]

(17A)

[Repealed]

(18)

Where a taxable supply is not the only matter to which a consideration relates, the supply shall be deemed to be for such part of the consideration as is properly attributable to it.

(19)

Subject to the foregoing provisions of this section where any supply is made for no consideration, the value of that supply shall be nil.

(20)

[Repealed]

Section 10(2)(b): substituted (with effect on 1 July 2010), on 29 August 2011, by section 237(1) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).

Section 10(2B): inserted (with effect on 1 July 2010), on 29 August 2011, by section 237(2) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).

Section 10(3): substituted, on 10 October 2000 (applying on and after 10 October 2000), by section 89(1) of the Taxation (GST and Miscellaneous Provisions) Act 2000 (2000 No 39).

Section 10(3): amended, on 3 April 2006 (applying for supplies made on or after 1 October 1986), by section 287(1) of the Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 (2006 No 3).

Section 10(3): amended, on 1 January 2005, by section 148(1) of the Taxation (GST, Trans-Tasman Imputation and Miscellaneous Provisions) Act 2003 (2003 No 122).

Section 10(3)(b): substituted, on 3 April 2006, by section 287(2) of the Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 (2006 No 3).

Section 10(3)(c): amended, on 1 April 2008 (effective for 2008–09 income year and later income years, except when the context requires otherwise), by section ZA 2(1) of the Income Tax Act 2007 (2007 No 97).

Section 10(3A): substituted, on 1 January 2005, by section 148(2) of the Taxation (GST, Trans-Tasman Imputation and Miscellaneous Provisions) Act 2003 (2003 No 122).

Section 10(3AB): inserted, on 3 April 2006 (applying for supplies made on or after 1 October 1986), by section 287(3) of the Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 (2006 No 3).

Section 10(3B): inserted, on 1 January 2005, by section 148(2) of the Taxation (GST, Trans-Tasman Imputation and Miscellaneous Provisions) Act 2003 (2003 No 122).

Section 10(3C): inserted, on 1 January 2005, by section 148(2) of the Taxation (GST, Trans-Tasman Imputation and Miscellaneous Provisions) Act 2003 (2003 No 122).

Section 10(3C)(a): amended, on 1 April 2008 (effective for 2008–09 income year and later income years, except when the context requires otherwise), by section ZA 2(1) of the Income Tax Act 2007 (2007 No 97).

Section 10(3C)(b): amended, on 1 April 2008 (effective for 2008–09 income year and later income years, except when the context requires otherwise), by section ZA 2(1) of the Income Tax Act 2007 (2007 No 97).

Section 10(3D): inserted, on 1 January 2005, by section 148(2) of the Taxation (GST, Trans-Tasman Imputation and Miscellaneous Provisions) Act 2003 (2003 No 122).

Section 10(3D)(b): amended, on 1 April 2008 (effective for 2008–09 income year and later income years, except when the context requires otherwise), by section ZA 2(1) of the Income Tax Act 2007 (2007 No 97).

Section 10(3D)(b)(i): amended, on 1 April 2008 (effective for 2008–09 income year and later income years, except when the context requires otherwise), by section ZA 2(1) of the Income Tax Act 2007 (2007 No 97).

Section 10(3E): inserted, on 1 January 2005, by section 148(2) of the Taxation (GST, Trans-Tasman Imputation and Miscellaneous Provisions) Act 2003 (2003 No 122).

Section 10(4): substituted (with effect on 3 December 1985), on 8 August 1986, by section 8(4) of the Goods and Services Tax Amendment Act 1986 (1986 No 43).

Section 10(4): amended, on 6 October 2009, by section 708 of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section 10(4) first proviso: amended, on 1 April 1993, by section 4 of the Goods and Services Tax Amendment Act 1993 (1993 No 10).

Section 10(5): substituted, on 10 October 2000 (applying on and after 10 October 2000), by section 89(4) of the Taxation (GST and Miscellaneous Provisions) Act 2000 (2000 No 39).

Section 10(5A): substituted, on 1 April 2005, by section 139 of the Credit Contracts and Consumer Finance Act 2003 (2003 No 52).

Section 10(5A) credit contract: substituted (with effect on 1 April 2005), on 3 April 2006, by section 287(4) of the Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 (2006 No 3).

Section 10(5B): inserted (with effect on 1 April 2005), on 3 April 2006, by section 287(5) of the Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 (2006 No 3).

Section 10(5C): inserted (with effect on 1 April 2005), on 3 April 2006, by section 287(5) of the Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 (2006 No 3).

Section 10(6): substituted (with effect on 3 December 1985), on 8 August 1986, by section 8(6) of the Goods and Services Tax Amendment Act 1986 (1986 No 43).

Section 10(6): amended, on 20 May 2010 (applying to supplies made on or after 1 October 2010), by section 46(1) of the Taxation (Budget Measures) Act 2010 (2010 No 27).

Section 10(6): amended, on 1 July 1989 (applying to supplies made on and after 1 July 1989), by section 16(1) of the Finance Act 1989 (1989 No 13).

Section 10(6) proviso: amended, on 20 May 2010 (applying to supplies made on or after 1 October 2010), by section 46(1) of the Taxation (Budget Measures) Act 2010 (2010 No 27).

Section 10(6) proviso: amended, on 1 July 1989 (applying to supplies made on and after 1 July 1989), by section 16(1) of the Finance Act 1989 (1989 No 13).

Section 10(7): substituted, on 18 December 2006 (applying for fringe benefits provided or granted on or after 18 December 2006), by section 213(1) of the Taxation (Savings Investment and Miscellaneous Provisions) Act 2006 (2006 No 81).

Section 10(7)(a): amended, on 1 April 2008, by section 272(2) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section 10(7)(a): amended, on 1 April 2008 (effective for 2008–09 income year and later income years, except when the context requires otherwise), by section ZA 2(1) of the Income Tax Act 2007 (2007 No 97).

Section 10(7A): inserted, on 10 October 2000 (applying on and after 10 October 2000), by section 89(6) of the Taxation (GST and Miscellaneous Provisions) Act 2000 (2000 No 39).

Section 10(7A): amended (with effect on 1 April 2014), on 24 February 2016, by section 275(1) of the Taxation (Annual Rates for 2015–16, Research and Development, and Remedial Matters) Act 2016 (2016 No 1).

Section 10(7A): amended (with effect on 26 February 2015), on 24 February 2016, by section 275(2) of the Taxation (Annual Rates for 2015–16, Research and Development, and Remedial Matters) Act 2016 (2016 No 1).

Section 10(7A): amended, on 1 April 2014, by section 124 of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52).

Section 10(7B): inserted, on 1 April 2011 (applying to supplies made on or after 1 April 2011), by section 9(1) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).

Section 10(8): amended, on 1 April 2011 (applying to supplies made on or after 1 April 2011), by section 9(2) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).

Section 10(8): amended, on 10 October 2000 (applying on and after 10 October 2000), by section 89(7) of the Taxation (GST and Miscellaneous Provisions) Act 2000 (2000 No 39).

Section 10(8)(a): amended, on 12 December 1995, by section 4(1) of the Goods and Services Tax Amendment Act (No 2) 1995 (1995 No 75).

Section 10(8)(a): amended (with effect on 3 December 1985), on 8 August 1986, by section 8(7)(b) of the Goods and Services Tax Amendment Act 1986 (1986 No 43).

Section 10(10): substituted, on 10 April 1995, by section 5(1) of the Goods and Services Tax Amendment Act 1995 (1995 No 22).

Section 10(12): substituted, on 1 August 2003, by section 69(1) of the Racing Act 2003 (2003 No 3).

Section 10(12A): repealed, on 1 August 2003, by section 69(1) of the Racing Act 2003 (2003 No 3).

Section 10(13): substituted, on 1 August 2003, by section 69(1) of the Racing Act 2003 (2003 No 3).

Section 10(14): replaced, on 17 July 2013, by section 123 of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52).

Section 10(14)(b): amended, on 30 March 2017 (with effect on 1 April 2012), by section 351 of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 (2017 No 14).

Section 10(14B): inserted, on 1 October 2016, by section 57(1) of the Taxation (Residential Land Withholding Tax, GST on Online Services, and Student Loans) Act 2016 (2016 No 21).

Section 10(14C): inserted, on 1 October 2016, by section 57(1) of the Taxation (Residential Land Withholding Tax, GST on Online Services, and Student Loans) Act 2016 (2016 No 21).

Section 10(14D): inserted, on 1 October 2016, by section 57(1) of the Taxation (Residential Land Withholding Tax, GST on Online Services, and Student Loans) Act 2016 (2016 No 21).

Section 10(14E): inserted, on 1 October 2016, by section 57(1) of the Taxation (Residential Land Withholding Tax, GST on Online Services, and Student Loans) Act 2016 (2016 No 21).

Section 10(14F): inserted, on 1 October 2016, by section 57(1) of the Taxation (Residential Land Withholding Tax, GST on Online Services, and Student Loans) Act 2016 (2016 No 21).

Section 10(15): substituted, on 1 July 2004, by section 374 of the Gambling Act 2003 (2003 No 51).

Section 10(15A): substituted, on 1 July 2004, by section 374 of the Gambling Act 2003 (2003 No 51).

Section 10(15B): substituted, on 1 July 2004, by section 374 of the Gambling Act 2003 (2003 No 51).

Section 10(15C): inserted, on 1 January 2005, by section 148(3) of the Taxation (GST, Trans-Tasman Imputation and Miscellaneous Provisions) Act 2003 (2003 No 122).

Section 10(15C): amended, on 1 October 2016, by section 57(2) of the Taxation (Residential Land Withholding Tax, GST on Online Services, and Student Loans) Act 2016 (2016 No 21).

Section 10(15C): amended, on 1 April 2008 (effective for 2008–09 income year and later income years, except when the context requires otherwise), by section ZA 2(1) of the Income Tax Act 2007 (2007 No 97).

Section 10(15C)(a)(ii): amended, on 1 April 2008 (effective for 2008–09 income year and later income years, except when the context requires otherwise), by section ZA 2(1) of the Income Tax Act 2007 (2007 No 97).

Section 10(15C)(b)(ii): amended, on 1 April 2008 (effective for 2008–09 income year and later income years, except when the context requires otherwise), by section ZA 2(1) of the Income Tax Act 2007 (2007 No 97).

Section 10(16): repealed, on 10 October 2000 (applying on 10 October 2000), by section 89(9) of the Taxation (GST and Miscellaneous Provisions) Act 2000 (2000 No 39).

Section 10(16A): repealed, on 10 October 2000 (applying on 10 October 2000), by section 89(9) of the Taxation (GST and Miscellaneous Provisions) Act 2000 (2000 No 39).

Section 10(17): repealed, on 10 October 2000 (applying on 10 October 2000), by section 89(9) of the Taxation (GST and Miscellaneous Provisions) Act 2000 (2000 No 39).

Section 10(17A): repealed, on 10 October 2000 (applying on 10 October 2000), by section 89(9) of the Taxation (GST and Miscellaneous Provisions) Act 2000 (2000 No 39).

Section 10(20): repealed, on 10 October 2000 (applying on 10 October 2000), by section 89(9) of the Taxation (GST and Miscellaneous Provisions) Act 2000 (2000 No 39).