September 14, 2021
New Zealand proposes changes to GST invoicing requirements
The New Zealand Government has proposed comprehensive changes to the existing Goods and Services Tax (GST) invoicing rules to align the rules with changes in business practices and government initiatives around electronic invoicing. The proposed changes have been included in an omnibus tax bill introduced to Parliament on 8 September 2021. For background, see EY Global Tax Alert, New Zealand proposes changes to Goods and Services Tax, dated 13 September 2021.
The key proposed changes are:
- Replacement of the current requirement to issue and hold tax invoices and credit/debit notes to recipients with a requirement for suppliers to provide GST-registered recipients with information in relation to the supply (taxable supply information) or an amendment to the supply. The form of the communication of this information is not prescribed (i.e., no requirement to issue a document in a prescribed form, as is the case now).
- Both suppliers and recipients to be required to hold records of taxable supplies in their systems, including specified information in relation to supplies.
- Input tax deductions to be supported by business records showing the GST that has been borne on the supplies (no need to hold a “tax invoice”).
- Removal of the requirement to obtain Inland Revenue approval to issue buyer-created tax invoices.
- Repealing the simplified tax invoice for supplies not exceeding NZ$1,000.
- Increasing the low-value threshold from NZ$50 to NZ$200, under which taxable supply information is not required to be provided.
- The introduction of a new strict liability penalty for claiming input tax more than once in relation to the same supply (applying when reasonable care has not been taken in ensuring the accuracy of input tax recovery).
The changes are proposed to apply from the date the bill is enacted. This is expected to be around March 2022.
For additional information with respect to this Alert, please contact the following:
Ernst & Young Limited (New Zealand), Indirect Tax, Auckland