Your responsibilities after cancelling your GST registration
What you must do
Check the list below for responsibilities you must follow after cancelling your GST registration.
- You will be required to file GST returns until the approved cancellation date.
- You must still meet all your GST responsibilities and requirements incurred while you were registered.
- You must not issue invoices that show a GST number or GST included in the prices you charge.
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If your business has stopped before you cancelled your registration you must make sure you have accounted for GST on all money:
- owed to you by debtors, and
- that you owe to creditors.
- If you keep assets from your business to use them privately or in another business, you must make an adjustment in your final GST return - see "Important" box below.
- If you sold or are selling assets from your business, you must include these in your final GST return. This includes any assets bought before GST was introduced on 1 October 1986. Typical assets are land, cars, computers and furniture.
- You must keep your GST records for seven years. This does not apply to companies that have been officially wound up or dissolved.
Example
Vincent has been registered for GST since 1 October 1986 and applied for cancellation on 1 July 2007. We approved the request effective from 31 July 2007.
On 1 September 2007, an Inland Revenue investigator discovered that Vincent didn't correctly account for GST in the GST return to 31 May 2007. Vincent is still liable for any underpaid GST and penalties, even though he is no longer registered.
Important - GST rate change affecting time of supply
Time of supply occurs at the time immediately before cessation of GST registration, so if you keep any goods after you cancel your GST registration, the retained goods are accounted for in the period cessation occurs in.
Example: Nathan is a registered person running a taxi business. He retired on 30 September 2010 and kept his taxi for personal use. The value of the asset based on current market value is $15,000.
In his final GST return he included one-ninth of $15,000 ($1,666.67) in the total adjustments in Box 9, having transferred this amount from his IR372 calculation sheet.
If Nathan chooses to retire instead on 31 October 2010, he would have to account for GST at the new rate of 3/23 on the value of the car ($1,956.52). He would have had to pay additional GST of $289.85 if he retired on 31 October.
Next steps
Date published: 25 Jun 2010
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