Changes for GST: Invoicing and record keeping changes

Changes for GST: Invoicing and record keeping changes Video information

Audio transcript

Slide 1

Narrator

Kia ora everyone and welcome to this webinar we’re we’ll be covering off the upcoming changes for GST.

My name is Helen Mitchell and with me today is Rian Shearman.

We are both External Relationship Managers at Inland Revenue.

Slide 2

Narrator

Today we will be taking you through the GST invoicing and record keeping changes that were introduced in the Taxation (Annual Rates for 2021–22, GST, and Remedial Matters) Act 2022. The new rules come into effect on 1 April 2023.

Please note: The information in this presentation is current as at 23 February 2023.

Slide 3

Narrator

The rules for GST invoicing and record keeping are changing from 1 April 2023.

The new requirements are designed to allow greater flexibility, so keeping GST records is about to get easier.

Before we move on to look at the new rules, I think it’s important to note that if your invoicing practices are compliant with the current rules, they will comply with the new rules.

I’ll also add that how you calculate GST is not changing, only the rules relating to invoicing and record keeping.

Ok, so let’s take a look at what’s changing..

Slide 4

Narrator

The requirement to use tax invoices is being replaced by a more general requirement to provide and keep certain records known as ‘taxable supply information’.

This means there will no longer be a requirement to provide and keep a single physical document holding the taxable supply information, such as a tax invoice, credit note, or debit note.

To reflect this:

The term ‘taxable supply information’ will replace the current term ‘tax invoice’.
‘Supply correction information’ will replace the current terms ‘debit note’ and ‘credit note’.
And ‘buyer-created taxable supply information’ will replace ‘buyer-created tax invoice’.

Slide 5

Narrator

Taxable supply information refers to the minimum set of information buyers and sellers need to keep as evidence of a transaction.

The taxable supply information you need to provide or keep depends on the value and the type of supply – we’ll go into more detail on this shortly.

You can continue to use tax invoices to satisfy the taxable supply information requirements, but the new rules will also mean that the information can also be held in other forms, such as supplier agreements, contracts, and bank statements.

Slide 6

Narrator

When the new rules come into effect, the words ‘tax invoice’ will no longer need to be shown. So the documents you receive from 1 April may look different to what you are receiving today.

Businesses can still choose to use the wording tax invoice, but they may choose to update this to taxable supply information, invoice or to not name their documents at all.

As I mentioned earlier, if you’d prefer to continue providing taxable supply information in a single document marked as a 'tax invoice’, you can.

So let’s look at what is required for taxable supply information…

Slide 7

Narrator

As I mentioned before, the taxable supply information you need to supply or keep depends on the value and the type of supply.

From 1 April 2023, the 3 threshold requirements for GST supplies are:

$200 or less
More than $200 and up to $1,000, and
More than $1,000.

The amount of information required increases as the value of the supply increases, but the information required under these new rules is generally less than is required under the current rules.

Slide 8

Narrator

For supplies of $200 or less, taxable supply information includes the seller’s name or trade name, the date of invoice, or where no invoice is issued the time of supply, a description of the goods or services, and the total amount payable. This information could be contained in an invoice or it could be contained in your business records.

Our example shows an invoice, but in a lot of cases for these low-value transactions, a till receipt will meet the requirements for both buyer and seller.

Slide 9

Narrator

For supplies of more than $200 and up to $1,000, your taxable supply information must show all the previous details plus the seller’s GST number, and a clear indication of the amount of GST included in the sale price.

Slide 10

Narrator

For supplies of more than $1,000, your taxable supply information must show all the previous details plus information to identify the buyer of the goods or services.

The taxable supply information does not need to include details relating to the quantity or volume of the supply. However, this information should be captured elsewhere in your business records.

I will now hand you over to Rian. Rian will handle further invoicing requirements.

Slide 11

Narrator

Thanks Helen. Secondhand goods and certain imported goods and services have their own requirements.

If you buy or sell secondhand goods, you will need the following information:

Seller’s name or trade name
Seller’s address
Date on which the goods were supplied
Description of the goods
Quantity or volume of the goods
Total amount payable

Slide 12

Narrator

For certain imported goods and services, the majority of the requirements are largely the same. You will need: the seller’s name or trade name, the seller's address, the date of invoice, or where no invoice is issued, the time of supply, a description of the goods or services, the total amount payable.

The key differences are that the taxable supply information will also need to include: any amount that represents salary or wages paid to an employee of the seller, or a company in a commonly owned group with the seller, and any amount that represents interest incurred by the seller or a company in a commonly owned group with the seller.

I’ll just add that these changes don't apply to low value imported goods.

Slide 13

Narrator

There are also changes for supplier groups and their shared invoices.

Supplier groups are 2 or more GST-registered persons who issue shared invoices from 2 or more separate sellers, to buyers.

The issuing member of the supplier group will need to provide taxable supply information. This must include the name and registration number of either:

the member making the supply, or
the issuing member.

All the other requirements for taxable supply information must also be included.

Now that we’ve gone through the different requirements based on the value and type of supply. Let’s look at the rules around providing taxable supply information…

Slide 14

Narrator

For supplies of $200 or more, taxable supply information must be provided to GST-registered buyers within 28 days of a request (or by an alternative date agreed to by the parties).

For supplies of less than $200, sellers are required to keep a record of the supply, but they are not required to provide taxable supply information. The buyer will be responsible for keeping their own records.

Now, what if you can’t meet all of the requirements..

Slide 15

Narrator

If you have a problem meeting the requirements because you can’t provide a particular piece of information, you can apply for approval to provide other information instead. You can do this by sending us a message in myIR. Previously this was known as applying for a modified tax invoice.

An example of when this may apply, is the sale of goods via an app where the app does not have a field for the buyer to enter their address and this field cannot be added.

If you already have a modified tax invoice arrangement, that has been approved by Inland Revenue, this can continue to be used for taxable supply information.

Slide 16

Narrator

A new strict liability offence has been introduced to prevent buyers from claiming multiple input tax credits for the same taxable supply. This replaces the previous knowledge offence penalty that applied to sellers who knowingly issued multiple tax invoices for the same taxable supply.

It will not apply if the person took reasonable care when claiming the input tax or corrected the amount claimed under section 113A of the Tax Administration Act.

Now we’ll move on to what customers will need to do if a correction is required…

Slide 17

Narrator

From 1 April 2023, there will be more situations where supply correction information must be provided.

Supply correction information must be provided when the taxable supply information includes incorrect information, or when the seller has included an incorrect GST amount in their GST return.

Examples of when corrections may be required, include where: 

The supply is cancelled.
All or some of the goods are returned to the seller.
Some of the goods were not delivered to the buyer.
There is an incorrect description of the goods or services. 
Incorrect seller information included.
Incorrect buyer details included.
The date is incorrect.
GST is calculated at the wrong rate.
An incorrect GST amount is charged.

Slide 18

Narrator

You must retain supply correction information with the following details: 

The seller’s name (or trade name) and GST number
The date the correction was provided
Information identifying the taxable supply information (for example, an invoice number)
The correction to the taxable supply information including, if relevant, a correction to the amount of GST charged for the supply

I’ll now hand you back to Helen to wrap us up.

Slide 19

Narrator

Thanks, Rian,

To get yourself ready for the changes, we suggest you familiarise yourself with the new rules. The changes are designed for greater flexibility, so invoicing practices compliant with the current rules will comply with the new rules. However, even if you decide not to adopt the changes, if your suppliers do then you could be affected.

You may want to identify how these new rules may impact your business processes and systems. If you use third party software, please talk to your provider about how they are incorporating these changes into their software.

You may also want to determine what changes you may need to make to be ready for April.

If you have a tax agent, you may like to talk to them about what these changes will mean for you.

Slide 20

Narrator

You can find more information about these changes on our website www.ird.govt.nz/gst-invoicing-changes, or in the Taxation (Annual Rates for 2021-22, GST, and Remedial Matters) Act.

Remedial changes are also underway to ensure the rules work as intended. These changes are in the Taxation (Annual Rates for 2022-23, Platform Economy, and Remedial Matters) Bill, which is expected to be enacted before 1 April 2023. These remedial changes have been reflected in the information we have presented here.

Slide 21

Narrator

That brings us to the end of today’s presentation. Thank you for watching.

Here's more information about the other webinars we’re going to be running:

2023 changes

Do you have any questions about our webinar, please email us: [email protected]