11A Zero-rating of services

(1)

A supply of services that is chargeable with tax under section 8 must be charged at the rate of 0% in the following situations:

(a)

the services, not being ancillary transport activities such as loading, unloading and handling, are the transport of passengers or goods—

(i)

from a place outside New Zealand to another place outside New Zealand; or

(ii)

from a place in New Zealand to a place outside New Zealand; or

(iii)

from a place outside New Zealand to a place in New Zealand; or

(b)

the services are the transport of passengers from a place in New Zealand to another place in New Zealand to the extent that the transport is by aircraft, as defined in section 2 of the Civil Aviation Act 1990, and is international carriage for the purpose of that Act; or

(bb)

the services are the transport of passengers from a place in New Zealand to another place in New Zealand by sea as part of an international cruise if either the first place of departure, or the final place of destination, of the cruise is outside New Zealand; or

(c)

the services, including ancillary transport activities such as loading, unloading and handling, are the transport of goods from a place in New Zealand to another place in New Zealand to the extent that the services are supplied by the same supplier as part of the supply of services to which paragraph (a)(ii) or (a)(iii) applies; or

(cb)

the services, including ancillary activities such as loading, unloading, handling and storing, are the transport of household goods from a place in New Zealand to another place in New Zealand, if—

(i)

the services are supplied to a person who, at the time of the supply, is non-resident and outside New Zealand; and

(ii)

the goods are entered for home consumption under the Customs and Excise Act 1996; and

(iii)

the arrangement for the supply of the services is made before the goods are entered; and

(iv)

the services are reasonably expected to be completed within the period of 28 days that begins on the date of entry of the goods; or

(d)

the services are the insuring, or the arranging of the insurance, or the arranging of the transport of passengers or goods to which any one of paragraphs (a) to (cb) applies; or

(e)

the services are supplied directly in connection with land situated outside New Zealand, or with an improvement to such land, or are supplied in connection with such land or improvement and are intended to enable or assist a change in the physical condition, or ownership or other legal status, of the land or improvement; or

(f)

the services are supplied directly in connection with moveable personal property, other than choses in action, situated outside New Zealand when the services are performed; or

(g)

the services are supplied to overseas postal organisations for the delivery in New Zealand of postal articles mailed outside New Zealand; or

(h)

the services are supplied directly in connection with goods supplied from outside New Zealand and whose destination is outside New Zealand, including stores for craft, only if the goods are not removed from the ship or aircraft in which they arrived while the ship or aircraft is in New Zealand; or

(i)

the services are supplied directly in connection with goods referred to in section 116 of the Customs and Excise Act 1996; or

(ib)

the services are supplied directly in connection with goods to which section 11(1)(i) applies; or

(j)

the services—

(i)

are physically performed outside New Zealand; and

(ii)

are not remote services supplied to a New Zealand resident who is not a registered person; or

(jb)

the services are the arranging of underlying services that—

(i)

are physically performed outside New Zealand; and

(ii)

are not remote services supplied to a New Zealand resident who is not a registered person; or

(jc)

the services are a supply of services to which section 60(1C)(a) applies, being a supply from an underlying supplier to an operator of a marketplace; or

(k)

subject to subsection (2), the services are supplied to a person who is a non-resident and who is outside New Zealand at the time the services are performed, not being services which are—

(i)

supplied directly in connection with land situated in New Zealand, or with an improvement to such land, or are supplied in connection with such land or improvement and are intended to enable or assist a change in the physical condition, or ownership or other legal status, of the land or improvement; or

(ii)

supplied directly in connection with moveable personal property, other than choses in action or goods to which paragraph (h) or (i) applies, situated in New Zealand at the time the services are performed; or

(iii)

the acceptance of an obligation to refrain from carrying on a taxable activity, to the extent to which the activity would have occurred within New Zealand; or

(l)

subject to subsection (2), the services are the supply of information to a person who is a non-resident and who is outside New Zealand at the time the services are performed, if the services are supplied directly in connection with moveable personal property situated in New Zealand at the time the services are performed; or

(m)

the services are supplied—

(i)

directly in connection with goods, the supply of which was subject to any one of section 11(1)(a) to (eb); and

(ii)

to a recipient who, when the services are performed, is a non-resident and outside New Zealand; or

(maa)

the services are supplied—

(i)

directly in connection with goods, the supply of which is subject to section 11(1)(p); and

(ii)

to a recipient who, when the services are performed, is a non-resident and not a registered person; or

(ma)

the services relate to goods under warranty to the extent that the services are—

(i)

provided under the warranty; and

(ii)

supplied for consideration that is given by a warrantor who is a non-resident, not a registered person and who is outside New Zealand at the time the services are performed; and

(iii)

in respect of goods that were subject to tax under section 12(1); or

(n)

subject to subsection (4), the services are—

(i)

the filing, prosecution, granting, maintenance, transfer, assignment, licensing or enforcement of intellectual property rights, including patents, designs, trade marks, copyrights, plant variety rights, know-how, confidential information, trade secrets or similar rights; or

(ii)

other services in respect of rights listed in subparagraph (i), including services involved in the making of searches, the giving of advice, opposing a grant or seeking the revocation of the rights, or opposing steps taken to enforce the rights; or

(o)

the services are the acceptance of an obligation to refrain from pursuing or exercising in whole or in part rights listed in paragraph (n) to the extent that the rights are for use outside New Zealand; or

(p)

the services are the acceptance of an obligation to refrain from carrying on a taxable activity if the activity would have occurred outside New Zealand; or

(q)

the services are financial services that are supplied in respect of a taxable period, by a registered person who has made an election under section 20F, to a registered person who makes supplies of goods and services such that taxable supplies that are not charged with tax at the rate of 0% under this paragraph or under paragraph (r) make up not less than 75% of the total value of the supplies in respect of—

(i)

a 12-month period that includes the taxable period; or

(ii)

a period acceptable to the Commissioner; or

(r)

the services are financial services that are supplied in respect of a taxable period, by a registered person who has made an election under section 20F, to a person who is a member of a group of companies for the purposes of section IA 6 of the Income Tax Act 2007 and—

(i)

the members of the group make supplies of goods and services to persons who are not members of the group in respect of—

(A)

a 12-month period that includes the taxable period; or

(B)

a period acceptable to the Commissioner; and

(ii)

not less than 75% of the total value of the supplies referred to in subparagraph (i) consists of taxable supplies that are not charged with tax at the rate of 0% under this paragraph or under paragraph (q); or

(s)

the services are an emissions unit and the supply is the transfer of the emissions unit, other than a transfer by the Crown under—

(i)

an agreement relating to a project to reduce emissions:

(ii)

a negotiated greenhouse agreement, to a person because the person exceeds the milestone targets under the agreement:

(t)

the services are an emissions unit, and the supply is the surrender of the emissions unit under section 63 of the Climate Change Response Act 2002; or

(u)

the services are supplied to or by the Crown as consideration for a supply—

(i)

for which there is no payment of a price; and

(ii)

that is chargeable at the rate of 0% under paragraph (s) or (t); or

(v)
[Repealed]

(w)

the supply is a sale or other disposal of services that are a unit—

(i)

issued by reference to the sequestration, or avoidance of emission, of human-induced greenhouse gases; and

(ii)

other than an emissions unit; and

(iii)

verified to an internationally recognised standard; or

(x)

the services are remote services to which section 8(3)(c) applies that are provided to a registered person and the supplier has chosen under section 8(4D) to treat the supply as made in New Zealand.

(1B)

Subsection (1)(j) does not apply to a supply of services that is treated by section 8(4B) as being made in New Zealand unless the nature of the services is such that the services can be physically received at no time and place other than the time and place at which the services are physically performed.

(1C)

For the purposes of subsection (1)(jb), the services that are the arranging of the underlying services may include more than 1 supply if the supplies are made to facilitate the supply of the underlying services.

(2)

Subsection (1)(k) and (1)(l) do not apply to a supply of services under an agreement that is entered into, whether directly or indirectly, with a person (person A) who is a non-resident if—

(a)

the performance of the services is, or it is reasonably foreseeable at the time the agreement is entered into that the performance of the services will be, received in New Zealand by another person (person B), including—

(i)

an employee of person A; or

(ii)

if person A is a company, a director of the company; and

(b)

it is reasonably foreseeable, at the time the agreement is entered into, that person B will not receive the performance of the services in the course of making taxable or exempt supplies.

(3)

For the purpose of subsection (1)(k), (1)(l) and (1)(ma), and subsection (1)(n) as modified by subsection (4)(b), outside New Zealand, for a company or an unincorporated body that is not resident, includes a minor presence in New Zealand, or a presence that is not effectively connected with the supply.

(3B)

For the purpose of subsection (1)(k), outside New Zealand, for a natural person, includes a minor presence in New Zealand that is not directly in connection with the supply.

(4)

Subsection (1)(n) applies only to the extent that—

(a)

the rights are for use outside New Zealand; or

(b)

the services are supplied to a person who is a non-resident and who is outside New Zealand when the services are performed.

(5)

This section does not apply to supplies of telecommunications services.

(6)

The availability of a deduction under subsection (1)(q) and (r) must be determined using a method allowed by section 20E.

(7)

Subsection (1)(x) does not apply to a supply of services for which the supplier subsequently makes an election under section 24(5B).

Section 11A: inserted, on 10 October 2000 (applying on and after 10 October 2000), by section 90(1) of the Taxation (GST and Miscellaneous Provisions) Act 2000 (2000 No 39).

Section 11A(1)(b): amended, on 1 June 2004, by section 41(3) of the Civil Aviation Amendment Act 2004 (2004 No 8).

Section 11A(1)(bb): inserted, on 26 March 2003, by section 156(1) of the Taxation (Maori Organisations, Taxpayer Compliance and Miscellaneous Provisions) Act 2003 (2003 No 5).

Section 11A(1)(cb): inserted, on 25 November 2003 (applying to supplies made on or after 25 November 2003), by section 149(1) of the Taxation (GST, Trans-Tasman Imputation and Miscellaneous Provisions) Act 2003 (2003 No 122).

Section 11A(1)(d): amended, on 25 November 2003 (applying to supplies made on or after 25 November 2003), by section 149(2) of the Taxation (GST, Trans-Tasman Imputation and Miscellaneous Provisions) Act 2003 (2003 No 122).

Section 11A(1)(e): replaced, on 1 April 2017, by section 353(1) of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 (2017 No 14).

Section 11A(1)(ib): inserted, on 30 March 2017, by section 353(2) of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 (2017 No 14).

Section 11A(1)(j): replaced (with effect on 1 October 2016), on 30 March 2017, by section 353(3) of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 (2017 No 14).

Section 11A(1)(jb): inserted (with effect on 1 October 2016), on 30 March 2017, by section 353(3) of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 (2017 No 14).

Section 11A(1)(jc): inserted (with effect on 1 October 2016), on 30 March 2017, by section 353(3) of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 (2017 No 14).

Section 11A(1)(k): amended, on 25 November 2003, by section 149(3) of the Taxation (GST, Trans-Tasman Imputation and Miscellaneous Provisions) Act 2003 (2003 No 122).

Section 11A(1)(k)(i): replaced, on 1 April 2017, by section 353(4) of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 (2017 No 14).

Section 11A(1)(k)(ii): replaced, on 1 April 2017, by section 353(4) of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 (2017 No 14).

Section 11A(1)(k)(iii): inserted, on 1 April 2017, by section 353(4) of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 (2017 No 14).

Section 11A(1)(l): amended, on 25 November 2003, by section 149(3) of the Taxation (GST, Trans-Tasman Imputation and Miscellaneous Provisions) Act 2003 (2003 No 122).

Section 11A(1)(m): substituted, on 25 November 2003, by section 149(4) of the Taxation (GST, Trans-Tasman Imputation and Miscellaneous Provisions) Act 2003 (2003 No 122).

Section 11A(1)(m)(i): amended (with effect on 17 May 2007), on 19 December 2007, by section 274 of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section 11A(1)(maa): inserted, on 30 June 2014, by section 189(1) of the Taxation (Annual Rates, Employee Allowances, and Remedial Matters) Act 2014 (2014 No 39).

Section 11A(1)(ma): inserted, on 17 October 2002 (applying on and after 1 August 2002), by section 100(1) of the Taxation (Relief, Refunds and Miscellaneous Provisions) Act 2002 (2002 No 32).

Section 11A(1)(ma)(ii): amended, on 25 November 2003, by section 149(3) of the Taxation (GST, Trans-Tasman Imputation and Miscellaneous Provisions) Act 2003 (2003 No 122).

Section 11A(1)(p): amended, on 1 January 2005, by section 149(5) of the Taxation (GST, Trans-Tasman Imputation and Miscellaneous Provisions) Act 2003 (2003 No 122).

Section 11A(1)(q): added, on 1 January 2005, by section 149(5) of the Taxation (GST, Trans-Tasman Imputation and Miscellaneous Provisions) Act 2003 (2003 No 122).

Section 11A(1)(r): added, on 1 January 2005, by section 149(5) of the Taxation (GST, Trans-Tasman Imputation and Miscellaneous Provisions) Act 2003 (2003 No 122).

Section 11A(1)(r): 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 11A(1)(r)(ii): amended, on 1 January 2009 (applying to supplies made on or after 1 January 2009), by section 80(1) of the Climate Change Response (Emissions Trading) Amendment Act 2008 (2008 No 85).

Section 11A(1)(s): substituted (with effect on 1 July 2010), on 7 September 2010, by section 191(1) of the Taxation (Annual Rates, Trans-Tasman Savings Portability, KiwiSaver, and Remedial Matters) Act 2010 (2010 No 109).

Section 11A(1)(t): added, on 1 January 2009 (applying to supplies made on or after 1 January 2009), by section 80(1) of the Climate Change Response (Emissions Trading) Amendment Act 2008 (2008 No 85).

Section 11A(1)(u): substituted (with effect on 1 July 2010), on 21 December 2010, by section 11 of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).

Section 11A(1)(v): repealed (with effect on 1 July 2010), on 7 September 2010, by section 191(2) of the Taxation (Annual Rates, Trans-Tasman Savings Portability, KiwiSaver, and Remedial Matters) Act 2010 (2010 No 109).

Section 11A(1)(w): added, on 1 April 2010, by section 710(3) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section 11A(1)(w)(iii): amended, on 1 October 2016, by section 58(2) of the Taxation (Residential Land Withholding Tax, GST on Online Services, and Student Loans) Act 2016 (2016 No 21).

Section 11A(1)(x): inserted, on 1 October 2016, by section 58(2) of the Taxation (Residential Land Withholding Tax, GST on Online Services, and Student Loans) Act 2016 (2016 No 21).

Section 11A(1B): substituted, on 1 January 2005, by section 145(1) of the Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 (2004 No 111).

Section 11A(1C): inserted (with effect on 1 October 2016), on 30 March 2017, by section 353(5) of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 (2017 No 14).

Section 11A(2): amended, on 25 November 2003, by section 149(7) of the Taxation (GST, Trans-Tasman Imputation and Miscellaneous Provisions) Act 2003 (2003 No 122).

Section 11A(3): amended, on 17 October 2002 (applying on and after 1 August 2002), by section 100(2) of the Taxation (Relief, Refunds and Miscellaneous Provisions) Act 2002 (2002 No 32).

Section 11A(3B): inserted, on 30 June 2014, by section 189(2) of the Taxation (Annual Rates, Employee Allowances, and Remedial Matters) Act 2014 (2014 No 39).

Section 11A(4)(b): amended, on 25 November 2003, by section 149(7) of the Taxation (GST, Trans-Tasman Imputation and Miscellaneous Provisions) Act 2003 (2003 No 122).

Section 11A(5): added, on 1 July 2003, by section 156(2) of the Taxation (Maori Organisations, Taxpayer Compliance and Miscellaneous Provisions) Act 2003 (2003 No 5).

Section 11A(6): added, on 1 January 2005, by section 145(2) of the Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 (2004 No 111).

Section 11A(7): inserted, on 1 October 2016, by section 58(3) of the Taxation (Residential Land Withholding Tax, GST on Online Services, and Student Loans) Act 2016 (2016 No 21).