21G Definitions and requirements for apportioned supplies and adjustment periods

(1)

For the purposes of this section and sections 8(4B)(b), 9(2)(h), 20(3H) and (3JC), 20G, 21 to 21F, and 21H,—

(a)

percentage actual use, for a registered person and an adjustment period,—

(i)

means the extent to which the goods or services are actually used by the person for making taxable supplies; and

(ii)

is calculated for the period that starts when the goods or services are acquired and finishes at the end of the relevant adjustment period; and

(iii)

is expressed as a percentage of total use:

(b)

percentage intended use, for a registered person, means the extent to which the goods or services are intended to be used by the person for making taxable supplies, estimated at the time of acquisition under section 20(3G) and expressed as a percentage of total use:

(c)

percentage difference means the difference between the percentage actual use determined under paragraph (a) and, as applicable,—

(i)

the percentage intended use determined under paragraph (b); or

(ii)

for a subsequent adjustment period following a period in which a person has made an adjustment, the previous actual use of the goods or services in the earlier period.

(2)

For the purposes of this section and sections 20G, 21 to 21F, and 21H,—

(a)

the first adjustment period is a period that—

(i)

starts on the date of acquisition; and

(ii)

ends on the date as the person chooses that either corresponds to the person’s first balance date described in section 15B(6) that falls after the date of acquisition, or corresponds to the person’s first balance date that falls at least 12 months after the date of acquisition:

(b)

a subsequent adjustment period is a period of 12 months that—

(i)

starts on the day after the end of an earlier adjustment period; and

(ii)

ends on the last day of the equivalent taxable period in which the first adjustment period ended.

(3)

For the purposes of subsection (2)(b), a registered person who chooses under section 38(1) of the Tax Administration Act 1994 to change their balance date at some time in an income year may realign their subsequent adjustment periods with the new balance date. However, an affected adjustment period must be of at least 12 months duration and, if the new balance date causes an adjustment period to be shorter than 12 months, the relevant period is extended to the balance date of the following income year.

(4)

The number of adjustment periods in which a registered person must determine whether an adjustment is required under sections 20G and 21A, as applicable, may, as the person chooses, be limited to—

(a)

one of the following based on the value of the goods or services, excluding GST:

(i)

2 adjustment periods for goods or services valued at more than $5,000 but not more than $10,000:

(ii)

5 adjustment periods for goods or services valued at more than $10,000 but not more than $500,000:

(iii)

10 adjustment periods for goods or services valued at more than $500,000; or

(b)

the relevant adjustment periods that is equal to the number of years for the estimated useful life of the relevant asset as determined under the Tax Depreciation Rates Determinations set by the Commissioner under section 91AAF of the Tax Administration Act 1994.

(5)

Subsection (4) does not apply in relation to a supply of land.

(6)

An election by a registered person under subsection (4) to limit the number of adjustment periods applying to goods or services acquired by them cannot subsequently be changed.

(7)

Despite subsection (4) if, after making adjustments for goods or services for the number of adjustment periods, the person subsequently disposes, or is treated as disposing, of the relevant asset, they must make a final adjustment under section 21F in the taxable period in which the disposal occurs.

(7B)

If a person disposes, or is treated as disposing, of an asset before the last required adjustment period under subsection (4), then for the purposes of subsection (2)(a)(ii) and (b)(ii), the current adjustment period is treated as—

(a)

ending immediately before the date of the disposal; and

(b)

the final adjustment period.

(8)

If a person does not choose the number of adjustment periods for an apportioned supply, the limits set out in subsection (4)(a) apply.

Section 21G: substituted, on 1 April 2011 (applying to supplies made on or after 1 April 2011), by section 15(1) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).

Section 21G(1): amended, on 1 October 2016, by section 61 of the Taxation (Residential Land Withholding Tax, GST on Online Services, and Student Loans) Act 2016 (2016 No 21).

Section 21G(1): amended (with effect on 1 April 2013, applying in relation to supplies of goods other than land or improvements to land made on or after 1 April 2014; for supplies of land or improvements to land, applying from 17 July 2013), on 17 July 2013, by section 134(1) of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52).

Section 21G(2): amended (with effect on 1 April 2013, applying in relation to supplies of goods other than land or improvements to land made on or after 1 April 2014; for supplies of land or improvements to land, applying from 17 July 2013), on 17 July 2013, by section 134(2) of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52).

Section 21G(4): amended (with effect on 1 April 2013, applying in relation to supplies of goods other than land or improvements to land made on or after 1 April 2014; for supplies of land or improvements to land, applying from 17 July 2013), on 17 July 2013, by section 134(3) of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52).

Section 21G(7B): inserted, on 2 November 2012, by section 220 of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).