Goods and Services Tax Act 1985

3 Meaning of term financial services

(1)

For the purposes of this Act, the term financial services means any 1 or more of the following activities:

(a)

the exchange of currency (whether effected by the exchange of bank notes or coin, by crediting or debiting accounts, or otherwise):

(b)

the issue, payment, collection, or transfer of ownership of a cheque or letter of credit:

(c)

the issue, allotment, drawing, acceptance, endorsement, or transfer of ownership of a debt security:

(d)

the issue, allotment, or transfer of ownership of an equity security or a participatory security:

(e)

underwriting or sub-underwriting the issue of an equity security, debt security, or participatory security:

(f)

the provision of credit under a credit contract:

(g)

the renewal or variation of a debt security, equity security, participatory security, or credit contract:

(h)

the provision, taking, variation, or release of a guarantee, indemnity, security, or bond in respect of the performance of obligations under a cheque, credit contract, equity security, debt security, or participatory security, or in respect of the activities specified in paragraphs (b) to (g):

(i)

the provision, or transfer of ownership, of a life insurance contract or the provision of re-insurance in respect of any such contract:

(j)

the provision, or transfer of ownership, of an interest in a retirement scheme, or the management of a retirement scheme:

(k)

the provision or assignment of a futures contract through a defined market or at arm’s length if—

(i)

the contract does not provide for the delivery of a commodity; or

(ii)

the contract provides for the delivery of a commodity and the supply of the commodity is an exempt supply; or

(iii)

the contract provides for the delivery of money:

(kaa)

the provision or transfer of ownership of a financial option:

(ka)

the payment or collection of any amount of interest, principal, dividend, or other amount whatever in respect of any debt security, equity security, participatory security, credit contract, contract of life insurance, retirement scheme, financial option, or futures contract:

(l)

agreeing to do, or arranging, any of the activities specified in paragraphs (a) to (ka), other than advising thereon:

(m)

the investment in an entity, if—

(i)

the investment is in an equity security equal to or greater than 10% of all equity securities issued by the entity or in a participatory security equal to or greater than 10% of all participatory securities issued by the entity; and

(ii)

the investment allows the investor, or a person acting on behalf of the investor, to influence the management of the business of the entity:

(n)

the evaluation by an investor of an investment referred to in paragraph (m) in an entity and the planning or acting by the investor to influence the management of an entity for the principal purpose of preserving or increasing the value of such an investment.

(2)

For the purposes of this section—

cheque means a cheque as defined in the Bills of Exchange Act 1908, an instrument specified in section 5(2) of the Cheques Act 1960, a postal note, a money order, a traveller’s cheque, or any order or authorisation (whether in writing, by electronic means, or otherwise) to a financial institution to credit or debit any account

contributory scheme

(a)

means any scheme or arrangement that, in substance and irrespective of the form of the scheme or arrangement, involves the investment of money where—

(i)

the investor acquires or may acquire an interest in or right in respect of property; and

(ii)

that interest or right will or may be, under the terms of investment, used or exercised in conjunction with any other interest in or right in respect of property acquired in similar circumstances, whether at the same time or not; but

(b)

does not include a scheme or arrangement described in paragraph (a) that has 5 or fewer investors, provided that neither the manager of the scheme nor any associated person of the manager is the manager of another such scheme or arrangement

credit contract means a credit contract as defined in section 3 of the Credit Contracts Act 1981 immediately before the repeal of that Act

currency means any banknote or other currency of any country, other than when used as a collector’s piece, investment article, item of numismatic interest, or otherwise than as a medium of exchange

debt security means any interest in or right to be paid money that is, or is to be, owing by any person; but does not include a cheque

equity security means any interest in or right to a share in the capital of a body corporate

general accounting and record package services, in relation to financial services, includes—

(a)

the provision of any financial clearing system which may form part of a settlement process; and

(b)

the posting of transactions to customers’ accounts; and

(c)

the maintenance of those customers’ accounts; and

(d)

the provision of any ancillary services (such as network management, software support and development) supplied in relation to the services referred to in any of paragraphs (a), (b), and (c),—

but does not include the services referred to in paragraphs (a) to (d) where those services are supplied by a supplier of a financial service and are reasonably incidental and necessary to the supply of that financial service by that supplier of the financial service

life insurance contract means a contract lawfully entered into to the extent that it places a sum or sums at risk upon the contingency of the termination or continuance of human life, marriage, civil union or de facto relationship, or the birth of a child, but not to the extent that it provides for entitlements under Schedule 1, Part 4 of the Accident Compensation Act 2001 (which relates to entitlements arising from fatal injuries)

participatory security means any interest or right to participate in any capital, assets, earnings, or other property of any person where that interest or right forms part of a contributory scheme; and includes an interest in a unit trust (within the meaning of section YA 1 of the Income Tax Act 2007); but does not include an equity security, a debt security, money, or a cheque

retirement scheme has the meaning given in section 6(1) of the Financial Markets Conduct Act 2013.

(3)

Notwithstanding subsection (2), the terms debt security, equity security, and participatory security do not include any of the following:

(a)

a life insurance contract or any other contract of insurance:

(b)
[Repealed]

(c)

a share in the share capital of a flat or office owning company to which subpart 6 of Part 3 of the Land Transfer Act 2017 applies:

(d)

an interest in a retirement scheme.

(3B)

Despite subsection (2), 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.

(3C)

Despite subsection (2), 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.

(4)

Despite this section, financial services does not include—

(a)

the assignment or other transfer of a right to receive payment in relation to a taxable supply if, as a result of the assignment or transfer, output tax for the supply would not be or become attributable to a taxable period for the purpose of section 20(4):

(b)

debt collection services provided by a person other than the creditor whose debt is being collected.

(5)

Notwithstanding anything in this section, where any person supplies goods and services (being the supply of general accounting and record package services) to any person who is a supplier of financial services, or to a customer of the person who is a supplier of financial services, that supply shall, for the purposes of this Act, be deemed not to be a supply of financial services.

Section 3(1)(j): amended, on 1 December 2014, by section 150 of the Financial Markets (Repeals and Amendments) Act 2013 (2013 No 70).

Section 3(1)(k): substituted, on 10 October 2000 (applying on and after 10 October 2000), by section 84(1) of the Taxation (GST and Miscellaneous Provisions) Act 2000 (2000 No 39).

Section 3(1)(kaa): replaced, on 30 March 2017, by section 346(1) of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 (2017 No 14).

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

Section 3(1)(ka): amended, on 30 March 2017, by section 346(2) of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 (2017 No 14).

Section 3(1)(l): amended, on 18 December 2006, by section 212 of the Taxation (Savings Investment and Miscellaneous Provisions) Act 2006 (2006 No 81).

Section 3(1)(l): amended (with effect on 3 December 1985), on 8 August 1986, by section 3(2) of the Goods and Services Tax Amendment Act 1986 (1986 No 43).

Section 3(1)(m): added, on 18 December 2006, by section 212 of the Taxation (Savings Investment and Miscellaneous Provisions) Act 2006 (2006 No 81).

Section 3(1)(n): added, on 18 December 2006, by section 212 of the Taxation (Savings Investment and Miscellaneous Provisions) Act 2006 (2006 No 81).

Section 3(2) contributory scheme: inserted, on 1 December 2014, by section 150 of the Financial Markets (Repeals and Amendments) Act 2013 (2013 No 70).

Section 3(2) credit contract: substituted (with effect on 1 April 2005), on 3 April 2006, by section 284(1) of the Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 (2006 No 3).

Section 3(2) general accounting and record package services: inserted, on 19 December 1989 (applying to supplies made on or after 19 December 1989), by section 3(1) of the Goods and Services Tax Amendment Act (No 2) 1989 (1989 No 152).

Section 3(2) life insurance contract: substituted, on 8 September 1999 (applying on and after 1 April 1999), by section 78(1) of the Taxation (Remedial Matters) Act 1999 (1999 No 98).

Section 3(2) life insurance contract: amended (with effect on 1 April 2002), on 30 June 2014, by section 186 of the Taxation (Annual Rates, Employee Allowances, and Remedial Matters) Act 2014 (2014 No 39).

Section 3(2) life insurance contract: amended, on 1 April 2007, by section 3(2) of the Goods and Services Tax Amendment Act 2005 (2005 No 9).

Section 3(2) participatory security: amended, on 1 December 2014, by section 150 of the Financial Markets (Repeals and Amendments) Act 2013 (2013 No 70).

Section 3(2) retirement scheme: inserted, on 1 December 2014, by section 150 of the Financial Markets (Repeals and Amendments) Act 2013 (2013 No 70).

Section 3(2) superannuation scheme: repealed, on 1 December 2014, by section 150 of the Financial Markets (Repeals and Amendments) Act 2013 (2013 No 70).

Section 3(3)(b): repealed, on 3 April 2006 (applying for supplies of financial services that are made on or after 3 April 2006), by section 284(2) of the Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 (2006 No 3).

Section 3(3)(c): amended, on 12 November 2018, by section 250 of the Land Transfer Act 2017 (2017 No 30).

Section 3(3)(d): amended, on 1 December 2014, by section 150 of the Financial Markets (Repeals and Amendments) Act 2013 (2013 No 70).

Section 3(3B): inserted (with effect on 1 April 2005), on 3 April 2006, by section 284(3) of the Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 (2006 No 3).

Section 3(3C): inserted (with effect on 1 April 2005), on 3 April 2006, by section 284(3) of the Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 (2006 No 3).

Section 3(4): substituted, on 10 October 2000 (applying on and after 10 October 2000), by section 84(2) of the Taxation (GST and Miscellaneous Provisions) Act 2000 (2000 No 39).

Section 3(5): added, on 19 December 1989 (applying to supplies made on or after 19 December 1989), by section 3(2) of the Goods and Services Tax Amendment Act (No 2) 1989 (1989 No 152).