Quick Summary
The number of GST adjustment review periods for goods in New Zealand varies depending on the item's value and type, and these periods changed from 1 April 2023. Fewer adjustments are now required for land, as well as goods and services valued at $20,000 or less, simplifying compliance.
Details
Understanding Adjustment Review Periods
When a New Zealand business uses an asset for both taxable (business) and non-taxable (private or exempt) purposes, its GST treatment may require periodic adjustments based on changes in its actual use. These adjustments occur over specified 'review periods'.
- Changes from April 2023: The number and length of these adjustment periods have been modified to reduce administrative burden.
- Impact on Land: For land, fewer adjustments are now required.
- Impact on Goods and Services $20,000 or Less: Similarly, goods and services valued at $20,000 or less are subject to fewer adjustment review periods. This means businesses might not need to review and adjust the GST on these items as frequently as before.
- Higher Value Items: More substantial assets, especially those with values significantly above $20,000, will still typically require more frequent or a greater number of adjustment reviews over their useful life to accurately reflect changes in taxable use.
- Choosing Your Period: You can choose your adjustment period, but it must align with your balance date.
Source: GST guide (IR375)