14 Exempt supplies

(1)

The following supplies of goods and services shall be exempt from tax:

(a)

the supply of any financial services (together with the supply of any other goods and services, supplied by the supplier of those financial services, which are reasonably incidental and necessary to that supply of financial services), not being a supply referred to in subsection (1B):

(i)
[Repealed]

(ii)
[Repealed]

(b)

the supply by any non-profit body of any donated goods and services:

(c)

the supply of accommodation in any dwelling by way of—

(i)

hire; or

(ii)

a service occupancy agreement; or

(iii)

a licence to occupy:

(ca)

the supply of leasehold land by way of rental (not being a grant or sale of the lease of that land) to the extent that that land is used for the principal purpose of accommodation in a dwelling erected on that land:

(cb)

the supply of property by way of lease that is to be used for the principal purpose of accommodation in a dwelling by any person, other than a registered person in the course or furtherance of a taxable activity:

(d)

the supply, being a sale, by any registered person in the course or furtherance of any taxable activity of—

(i)

any dwelling; or

(ii)

the reversionary interest in the fee simple estate of any leasehold land,—

that has been used by the registered person for a period of 5 years or more before the date of the supply exclusively for the making of any supply or supplies referred to in paragraph (c) or paragraph (ca):

(e)

the supply of any fine metal, not being a supply which, but for this paragraph, would be charged with tax at the rate of 0% pursuant to section 11.

(1B)

The following supplies are excluded from the exemption under subsection (1):

(a)

a supply of financial services that, in the absence of subsection (1)(a), would be charged with tax at the rate of 0% under section 11A:

(b)

a supply described in paragraph (b) of the definition of associated supply:

(c)

a supply of goods and services which (although being part of a supply of goods and services which, but for this paragraph, would be an exempt supply under subsection (1)(a)) is not in itself, as between the supplier of that first-mentioned supply and the recipient, a supply of financial services in respect of which subsection (1)(a) applies.

(2)

A supplier and a recipient may agree, recording their agreement in a document, that a supply under subsection (1)(cb) is not an exempt supply if—

(a)

the lease was entered into before 16 May 2000; and

(b)

the supplier has, before 16 May 2000, treated a supply under the lease as being a taxable supply.

(3)

An amount is treated as being consideration for an exempt supply if it is—

(a)

penalty or default interest, or a charge in the nature of penalty or default interest, that is imposed—

(i)

under a contract for the supply of goods and services:

(ii)

under an enactment:

(b)

a penalty imposed on unpaid rates under the Local Government (Rating) Act 2002:

(c)

a postponement fee, or a part of a postponement fee, that is imposed under section 88 of the Local Government (Rating) Act 2002 and that relates to financial costs of the local authority arising from a postponement of rates.

Section 14(1)(a): substituted, on 19 December 1989 (applying to supplies made on or after 19 December 1989), by section 8(1) of the Goods and Services Tax Amendment Act (No 2) 1989 (1989 No 152).

Section 14(1)(a): amended, on 3 April 2006, by section 289(1)(a) of the Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 (2006 No 3).

Section 14(1)(a)(i): repealed, on 3 April 2006, by section 289(1)(b) of the Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 (2006 No 3).

Section 14(1)(a)(ii): repealed, on 3 April 2006, by section 289(1)(b) of the Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 (2006 No 3).

Section 14(1)(c): substituted, on 1 August 1990 (applying to supplies made on or after 1 August 1990), by section 6(1) of the Goods and Services Tax Amendment Act 1990 (1990 No 64).

Section 14(1)(ca): inserted (with effect on 3 December 1985), on 8 August 1986, by section 12(1) of the Goods and Services Tax Amendment Act 1986 (1986 No 43).

Section 14(1)(cb): inserted, on 10 October 2000 (applying on and after 10 October 2000), by section 92(3) of the Taxation (GST and Miscellaneous Provisions) Act 2000 (2000 No 39).

Section 14(1)(d): substituted, on 1 August 1990 (applying to supplies made on or after 1 August 1990), by section 6(2) of the Goods and Services Tax Amendment Act 1990 (1990 No 64).

Section 14(1)(e): added (with effect on 3 December 1985), on 8 August 1986, by section 12(3) of the Goods and Services Tax Amendment Act 1986 (1986 No 43).

Section 14(1)(e): amended, on 10 October 2000 (applying on and after 10 October 2000), by section 92(4) of the Taxation (GST and Miscellaneous Provisions) Act 2000 (2000 No 39).

Section 14(1B): inserted, on 3 April 2006 (applying in relation to the insertion of section 14(1B)(b) for supplies of financial services that are made on or after 3 April 2006), by section 289(2) of the Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 (2006 No 3).

Section 14(2): added, on 10 October 2000 (applying on and after 10 October 2000), by section 92(5) of the Taxation (GST and Miscellaneous Provisions) Act 2000 (2000 No 39).

Section 14(2): amended, on 2 June 2016, by section 186 of the Taxation (Transformation: First Phase Simplification and Other Measures) Act 2016 (2016 No 27).

Section 14(3): substituted, on 25 November 2003 (applying to an amount of penalty, interest, charge or fee that is imposed on or after 1 July 2003), by section 152(1) of the Taxation (GST, Trans-Tasman Imputation and Miscellaneous Provisions) Act 2003 (2003 No 122).