Goods and Services Tax Act 1985

3A Meaning of input tax

(1)

Input tax, in relation to a registered person, means—

(a)

tax charged under section 8(1) on a supply of goods or services acquired by the person:

(b)

tax levied under section 12(1) on goods entered for home consumption under the Customs and Excise Act 2018 by the person:

(c)

an amount determined under subsection (3) after applying subsection (2).

(2)

In the case of a supply by way of sale to a registered person of secondhand goods situated in New Zealand, the amount of input tax is determined under subsection (3) if—

(a)

the supply is not a taxable supply; and

(b)

the supply is not—

(i)

a supply of goods previously supplied to a registered person who has entered them for home consumption under the Customs and Excise Act 2018, whether the person is registered at the time they enter the goods for home consumption or later; and

(ii)

a supply of goods made by a non-resident, whether or not they made the earlier supply referred to in subparagraph (i); and

(c)

the goods acquired by the person for making taxable supplies are either—

(i)

not charged with tax at the rate of 0% under section 11A(1)(q) or (r); or

(ii)

charged with tax at the rate of 0% under section 11A(1)(q) or (r) and, before the acquisition, have never been owned or used by the person or an associated person.

(3)

The amount of input tax is—

(a)

if the supplier and the recipient are associated persons, the lesser of—

(i)

the tax included in the original cost of the goods to the supplier; and

(ii)

the tax fraction of the purchase price; and

(iii)

the tax fraction of the open market value of the supply; or

(b)

if the supplier and the recipient are associated persons and the supplier is deemed to have made a supply of the goods under section 5(3) that has been valued under section 10(7A), the lesser of—

(i)

the tax fraction of the open market value of the deemed supply under section 5(3); and

(ii)

the tax fraction of the purchase price; and

(iii)

the tax fraction of the open market value of the supply; or

(c)

if the supplier and the recipient are associated persons and the supplier is deemed to have made a supply of the goods under section 5(3) that has been valued under section 10(8), the lesser of—

(i)

the tax fraction of the valuation under section 10(8) of the deemed supply under section 5(3); and

(ii)

the tax fraction of the purchase price; and

(iii)

the tax fraction of the open market value of the supply; or

(d)

if the supplier and the recipient are not associated persons and the supply is not the only matter to which the consideration relates, the lesser of—

(i)

the tax fraction of the purchase price; and

(ii)

the tax fraction of the open market value of the supply; or

(e)

in all other cases, the tax fraction of the consideration in money for the supply.

(3B)

Despite subsection (3)(a), if a supply wholly or partly consists of land, and is part of an arrangement involving more than 2 associated parties and more than 1 supply, the amount of input tax for the supply must not be more than the amount accounted for as output tax for all supplies that are part of the arrangement.

(3C)

For a supply of goods or services meeting the requirements of section 21B(1)(a)(i) and (b), when the goods or services have been acquired from an associated person, the amount of input tax must not be more than the amount accounted for as output tax by the supplier of the goods or services.

(4)

[Repealed]

(4A)

[Repealed]

(5)

For the purpose of subsection (3), tax fraction means the tax fraction that applies at the time of supply.

Section 3A: inserted, on 10 October 2000 (applying to supplies made on and after 10 October 2000), by section 85(1) of the Taxation (GST and Miscellaneous Provisions) Act 2000 (2000 No 39).

Section 3A(1)(a): substituted, on 1 April 2011, by section 5(1) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).

Section 3A(1)(b): substituted, on 1 April 2011, by section 5(1) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).

Section 3A(1)(b): amended, on 1 October 2018, by section 443(3) of the Customs and Excise Act 2018 (2018 No 4).

Section 3A(2)(b): replaced (with effect on 14 September 2011), on 2 November 2012, by section 208(1) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).

Section 3A(2)(b)(i): amended, on 1 October 2018, by section 443(3) of the Customs and Excise Act 2018 (2018 No 4).

Section 3A(2)(c): substituted, on 1 April 2011, by section 5(2) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).

Section 3A(3B): inserted, on 1 April 2011, by section 5(3) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).

Section 3A(3C): inserted, on 1 April 2011, by section 5(3) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).

Section 3A(3C): amended (with effect on 1 April 2011), on 2 November 2012, by section 208(2) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).

Section 3A(4): repealed (with effect on 1 April 2011), on 2 November 2012, by section 208(3) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).

Section 3A(4A): repealed, on 1 April 2011, by section 5(4) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).