Zero rated purchases nz
GST is a tax on the supply of goods and services in New Zealand by a registered person on any taxable activity they carry out. The rate for GST is 15%, although goods and services can be “zero-rated” or “exempt”. Zero-rated. Certain taxable supplies are taxed at the rate of 0% rather than at the standard rate of 15%. We generally refer to goods and services you provide or sell in your business as supplies. You'll charge, claim and account for GST at the rate of 15% on these. There are four other categories of supplies that have specific GST accounting rules - exempt, zero-rated, special supplies and receiving remote services. To be a zero-rated supply, the above conditions for zero-rating must be satisfied at the time of settlement of the transaction (new section 11(8B)). If any of these conditions are not satisfied at the time of settlement, the supply should be taxed at 15%. If land is supplied as part of a larger supply, the whole supply is zero-rated. In general, GST should be returned on all land sales and claimed on all land purchases unless the property is used solely for making exempt supplies (e.g. residential accommodation) or the transaction is zero-rated (i.e. charged with GST at 0%).
We generally refer to goods and services you provide or sell in your business as supplies. You'll charge, claim and account for GST at the rate of 15% on these. There are four other categories of supplies that have specific GST accounting rules - exempt, zero-rated, special supplies and receiving remote services.
To be a zero-rated supply, the above conditions for zero-rating must be satisfied at the time of settlement of the transaction (new section 11(8B)). If any of these conditions are not satisfied at the time of settlement, the supply should be taxed at 15%. If land is supplied as part of a larger supply, the whole supply is zero-rated. Goods located outside New Zealand, which are not going to be imported into New Zealand, are zero-rated. Land acquired by non-profit body. Land that is acquired by a non-profit body in New Zealand may be zero-rated if it's used for making taxable supplies. Land transactions. Zero-rating of land transactions. To remove the risk to Inland Revenue from so-called “phoenix schemes”, the compulsory zero-rating rules came into effect in 2011 to treat certain supplies of land between GST-registered persons as zero-rated. Some parties who purchased their property prior to 2011 refer to their property as zero-rated. This would mean that the purchase was subject to GST, but at the rate of zero. That is very different to the standard residential property purchase that is not subject to GST at all. GST is not levied when a person export goods and then subsequently bring them back into New Zealand, if at the time of export, those goods were not zero-rated. However, if at the time of export, those goods were zero-rated, GST is levied on those goods when they are re-imported. GST is not levied on the importation of ‘fine metal’. Zero-Rated Goods: In countries that use a value-added tax (VAT), zero-rated goods are products on which VAT is not levied. Examples of goods that may be zero-rated include many types of foods and Prescription Drugs and dispensing fees are zero-rated. Most over the counter medications such as aspirin, vitamins and minerals, cold remedies, bandages, etc. are not zero-rated and GST/HST must be charged. (Generally, if the item does not require a prescription and is intended to treat a minor ailment it is not zero-rated.)
In general, GST should be returned on all land sales and claimed on all land purchases unless the property is used solely for making exempt supplies (e.g. residential accommodation) or the transaction is zero-rated (i.e. charged with GST at 0%).
Some parties who purchased their property prior to 2011 refer to their property as zero-rated. This would mean that the purchase was subject to GST, but at the rate of zero. That is very different to the standard residential property purchase that is not subject to GST at all. GST is not levied when a person export goods and then subsequently bring them back into New Zealand, if at the time of export, those goods were not zero-rated. However, if at the time of export, those goods were zero-rated, GST is levied on those goods when they are re-imported. GST is not levied on the importation of ‘fine metal’. Zero-Rated Goods: In countries that use a value-added tax (VAT), zero-rated goods are products on which VAT is not levied. Examples of goods that may be zero-rated include many types of foods and Prescription Drugs and dispensing fees are zero-rated. Most over the counter medications such as aspirin, vitamins and minerals, cold remedies, bandages, etc. are not zero-rated and GST/HST must be charged. (Generally, if the item does not require a prescription and is intended to treat a minor ailment it is not zero-rated.) Zero rating. Almost all countries apply preferential rates to some goods and services, making them either “zero rated” or “exempt.” For a “zero-rated good,” the government doesn’t tax its retail sale but allows credits for the value-added tax (VAT) paid on inputs. This reduces the price of a good.
Under the zero-rating mechanism, the accounting obligations of the parties would remain virtually unchanged. Accordingly, zero-rating the relevant transactions to the GST base risk is likely to be an easier mechanism for businesses to deal with. Any remaining concerns regarding zero-rating are intended to be resolved by anti-avoidance provisions.
Some parties who purchased their property prior to 2011 refer to their property as zero-rated. This would mean that the purchase was subject to GST, but at the rate of zero. That is very different to the standard residential property purchase that is not subject to GST at all. GST is not levied when a person export goods and then subsequently bring them back into New Zealand, if at the time of export, those goods were not zero-rated. However, if at the time of export, those goods were zero-rated, GST is levied on those goods when they are re-imported. GST is not levied on the importation of ‘fine metal’. Zero-Rated Goods: In countries that use a value-added tax (VAT), zero-rated goods are products on which VAT is not levied. Examples of goods that may be zero-rated include many types of foods and Prescription Drugs and dispensing fees are zero-rated. Most over the counter medications such as aspirin, vitamins and minerals, cold remedies, bandages, etc. are not zero-rated and GST/HST must be charged. (Generally, if the item does not require a prescription and is intended to treat a minor ailment it is not zero-rated.) Zero rating. Almost all countries apply preferential rates to some goods and services, making them either “zero rated” or “exempt.” For a “zero-rated good,” the government doesn’t tax its retail sale but allows credits for the value-added tax (VAT) paid on inputs. This reduces the price of a good.
Zero-rated supplies. Certain taxable supplies are taxed at the rate of 0% rather than at the standard rate of 15%. You must include all zero-rated supplies in Box 5 on your GST return along with your total taxable supplies.
Under the zero-rating mechanism, the accounting obligations of the parties would remain virtually unchanged. Accordingly, zero-rating the relevant transactions to the GST base risk is likely to be an easier mechanism for businesses to deal with. Any remaining concerns regarding zero-rating are intended to be resolved by anti-avoidance provisions. To be a zero-rated supply, the above conditions for zero-rating must be satisfied at the time of settlement of the transaction (new section 11(8B)). If any of these conditions are not satisfied at the time of settlement, the supply should be taxed at 15%. If land is supplied as part of a larger supply, the whole supply is zero-rated. Goods located outside New Zealand, which are not going to be imported into New Zealand, are zero-rated. Land acquired by non-profit body. Land that is acquired by a non-profit body in New Zealand may be zero-rated if it's used for making taxable supplies. Land transactions. Zero-rating of land transactions. To remove the risk to Inland Revenue from so-called “phoenix schemes”, the compulsory zero-rating rules came into effect in 2011 to treat certain supplies of land between GST-registered persons as zero-rated. Some parties who purchased their property prior to 2011 refer to their property as zero-rated. This would mean that the purchase was subject to GST, but at the rate of zero. That is very different to the standard residential property purchase that is not subject to GST at all.
GST is not levied when a person export goods and then subsequently bring them back into New Zealand, if at the time of export, those goods were not zero-rated. However, if at the time of export, those goods were zero-rated, GST is levied on those goods when they are re-imported. GST is not levied on the importation of ‘fine metal’.