Electing Goods as Non-Taxable Supplies for NZ GST

Can I elect goods as non-taxable supplies for GST in NZ?

Quick Summary

Yes, from 1 April 2023, you can elect to treat goods as non-taxable supplies in New Zealand if their principal purpose is not for use in your taxable activity. This election means you would not claim GST on the acquisition of these goods.

Details

Election for Non-Taxable Supplies

Another significant change introduced on 1 April 2023 relates to how businesses handle GST on acquisitions that are primarily for non-taxable use.

  • The Option: Businesses now have the ability to formally elect to treat certain goods as 'non-taxable supplies'.
  • Condition: This election is permissible when the principal purpose of acquiring those goods is not for use in your taxable activity (i.e., your business operations that generate GST-taxable sales).
  • Implication: If you make this election, you would not be able to claim any GST input tax credit on the purchase of these goods, as they are not being primarily used to make taxable supplies. This simplifies accounting by removing the need for ongoing adjustments for mixed-use items where business use is minimal.
Source: GST guide (IR375)