Changes coming for GST

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Nau mai

Haere mai

Welcome

Title: Topics

• Filing frequency
• Supplier groups
• Secondhand goods
• Rules for non-taxable goods
• Joint ventures.

Audio

The changes we cover today aim to improve clarity and compliance for businesses and tax professionals. We’ll cover GST filing frequency, supplier groups, secondhand goods, rules for non-taxable goods and joint ventures

Please note: The information in this presentation is current as at 20th of February 2026 and may be subject to change.

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Title: Correcting GST filing frequency

Subtitle: When selected in error

The correction must be requested:

• within 35 days from the end of the month that a person registered for GST, or
• by 20 January when a person registers for GST in November.

Once processed:

• The GST registration will be updated to reflect the correct filing frequency.
• The previous period will be invalidated to ensure compliance.

A confirmation letter will be issued to the customer outlining the new filing frequency requirements

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Changes are being introduced to allow the ability to correct a GST filing frequency when it was selected in error.

Previously, if a business selected the wrong filing frequency when registering for GST, it was difficult to correct. Going forward, that will be able to be fixed from the original registration start date.

The correction must be requested within 35 days from the end of the month that a person registered for GST, or by 20 January when a person registers for GST in November.

This change gives businesses greater flexibility and clarity, ensuring GST returns are accurate from the start. Once the correction is processed, Inland Revenue will update the registration, invalidate the incorrect period, and issue a confirmation letter to the customer.

This change takes effect the day after the Bill receives Royal Assent.

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Title: Supplier groups

Subtitle: Clarification

• Clarification in the GST rules to clearly define responsibilities within supplier groups.
• Issuing members of a supplier group are only responsible for providing taxable supply information or making corrections for members covered by a formal agreement.
• Members with activities outside the supplier group remain responsible for their own taxable supply information for those separate activities.
• Applies to taxable periods starting on or after 1 April 2023.

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There’s an important clarification in the GST rules for supplier groups. It will make it clear that an issuing member of a supplier group is only responsible for providing taxable supply information, such as invoices, or making corrections for other members that are covered by a formal agreement.

If a member of the group has activities outside the scope of that agreement, they remain responsible for their own taxable supply information for those separate activities.

This change ensures GST obligations are clearly defined within supplier groups. It also prevents confusion or unintended liability for issuing members when other members operate independently.

This should help businesses manage compliance more effectively by understanding exactly who is responsible for GST documentation in different contexts.

This will be back dated and apply to taxable periods starting on or after 1 April 2023.

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• GST-registered businesses can claim input credits for secondhand goods purchased before registration, provided those goods are used to make taxable supplies.
• The definition of secondhand goods input tax is being updated to cover situations where goods were acquired before being used in a taxable activity.
• This change aligns with the intent of GST input credits and reduces uncertainty for new registrants.

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There is also a further clarification regarding input credits for secondhand goods.

Businesses will be able to claim input credits for secondhand goods purchased before they registered for GST, as long as those goods are used to make taxable supplies.

The definition of secondhand goods input tax is also being updated to cover situations where goods were acquired before they were used in a taxable activity.

This change ensures businesses aren’t disadvantaged if they buy secondhand goods before registering for GST or increase their taxable use after purchase. It also aligns with the intent of GST input credits and reduces uncertainty for new registrants.

This change takes effect the day after the Bill receives Royal Assent.

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Title: Rules for non-taxable goods

Subtitle: Clarification

• Update to clarify when input tax deductions disqualify a supply from being treated as non-taxable.
• Ensures only integral or substantial improvement costs count toward disqualifying a supply.
• Will clarify that only deductions for the goods themselves or for substantial or integral improvements will prevent the supply from being treated as not subject to GST.

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There is an update to clarify when input tax deductions disqualify a supply from being treated as non-taxable. This means only integral or substantial improvement costs will count toward disqualifying a supply. When we say ‘integral,’ we mean the goods would be incomplete or unable to function without those items.

Under the current GST rules, some goods (like a house) can be sold without GST if they weren’t principally acquired for, or used in, a taxable activity and no input tax deductions were claimed.

The update will clarify that only deductions for the goods themselves or for substantial or integral improvements will prevent the supply from being treated as not subject to GST.

You may need to review past and future transactions to ensure compliance.

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Title: Record-keeping requirements for supplies to unregistered persons

• GST-registered suppliers no longer need to collect personal details (such as names and addresses) when selling to unregistered buyers, even if the supply exceeds $1,000.
• If the buyer is GST registered, they are responsible for notifying the seller and supplying necessary details.
• This change reduces unnecessary data collection and helps protect customer privacy.

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There is also a practical change to record-keeping requirements for high-value supplies to unregistered persons.

Previously, suppliers were required to collect personal details—such as names and addresses—for supplies over $1,000. This was intended to support input tax claims, but in practice, it only matters when the buyer is GST-registered.

Under the new rules, GST-registered suppliers no longer need to collect these details when selling to unregistered buyers, even for supplies exceeding $1,000. However, if the supply is over $1,000, and the buyer is GST registered, they are responsible for notifying the seller and supplying necessary details.

This change simplifies compliance and reduces unnecessary data collection, while also protecting customer privacy.

This comes into effect from the day after the Bill receives Royal Assent.

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Title: GST and Unincorporated Joint Ventures

Subtitle: Flow-through model

• From 1 April 2026, joint venture members will be able to account for their share of the joint venture individually through their own GST registration using a new flow-through model.
• Current GST rules for unincorporated bodies will apply to all joint ventures by default.
• If all members agree in writing, the joint venture may elect to use flow-through treatment.
• Registration threshold requirements are still determined at the joint venture level
• The rules only apply to joint ventures and cannot be used by other types of unincorporated bodies, such as partnerships.

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Changes are coming to GST rules for unincorporated joint ventures from 1 April 2026.

Joint venture members will be able to account for their share of the joint venture individually through their own GST registration using a new flow-through model.

Under this approach, by default, current GST rules for unincorporated bodies will apply to all joint ventures. However, if all members agree in writing, the joint venture may elect to use flow-through treatment.

It’s important to note that registration threshold requirements will still be determined at the joint venture level. So, if the joint venture is making more than $60,000 in taxable supplies, all members of the flow-through joint venture must register and account for their interest.

These rules cannot be used by other types of unincorporated bodies, such as partnerships.

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Title: GST and Unincorporated Joint Ventures

Subtitle: Transitional Rules

• Joint ventures registered before 1 April 2026 can cancel their registration and apply flow-through treatment at the member level if they elect before 1 April 2027.
• Transitional rule allows joint ventures electing flow-through before 1 April 2027 to backdate the change to 1 April 2026.
• Separate transitional rule validates past GST positions where flow-through was incorrectly applied before 1 April 2026, provided elections are made before 1 April 2027.
• New joint ventures can elect flow-through during the non-individual registration process.
• Rules take effect from 1 April 2026; elections must be made by 1 April 2027.

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Transitional rules provide flexibility for joint ventures as GST changes take effect from 1 April 2026.

Joint ventures registered before this date can cancel their GST registration and apply flow-through treatment at the member level if they elect before 1 April 2027.

A transitional rule allows these elections to be backdated to 1 April 2026.

There is also a separate transitional rule for joint ventures that have previously accounted for GST using a flow-through method before 1 April 2026. These past positions can be validated, provided elections are made before 1 April 2027.

New joint ventures can elect flow-through treatment during the non-individual registration process.

These changes align GST treatment with common industry practice, improve accuracy, and reduce compliance costs. You should review any joint venture arrangements and make timely elections to benefit from these transitional provisions.

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Title: Additional GST changes

Subtitle: Overview

• Requirement for principal purpose of asset
• Following an election, an asset must remain unused for the principal purpose of making taxable supplies in order for its disposal to be treated as a non-taxable supply.
• Business to business zero-rating of financial services election process
• Businesses can notify the Commissioner in writing, in addition to taking the relevant position in their GST return
• Customs Concessions
• A new concession will allow inherited goods to enter New Zealand without incurring GST.
• The existing low-value goods threshold of $1,000 will apply to gifts.
• GST secondhand goods interaction with adjustment rules

Clarifications provide consistency for GST treatment of secondhand goods between associated persons

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There are also some further GST changes, that may be of interest. These include:

Clarifying requirement for principal purpose of asset for certain goods sold as non-taxable supplies

The GST Act will be amended to require that, following an election, an asset must remain unused for the principal purpose of making taxable supplies in order for its disposal to be treated as a non-taxable supply.

Business-to-business zero-rating of financial services election process – On 1 April 2025, the rules changed so businesses could simply elect by taking that position in their tax return. The requirement to notify Inland Revenue was removed to reduce compliance costs. This meant businesses couldn’t proactively apply the election before they were required to take a position in their return.

To fix that businesses will now have the option to proactively notify Inland Revenue before taking a position in a return. This gives businesses flexibility and removes that timing gap. This change will have an effective date of 1 April 2025.

Customs Concessions – From 1 April 2026, a new concession will allow inherited goods to enter New Zealand without incurring GST.

The current legislation that allows gifts under $110 to be duty-free is redundant and will be removed. The existing low-value goods threshold of $1,000 will apply to gifts.

GST secondhand goods interaction with adjustment rules - Associated Persons in relation to secondhand goods

Clarifications provide consistency for GST treatment of secondhand goods between associated persons. This aligns legislation with current practice, extends eligibility, and avoids introducing new compliance burdens.