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GST Refunds for non-residents

Author: Sam Hornbrook

A special GST registration regime for non-residents is coming into effect on 1 April 2014. The regime will enable non-resident businesses that do not make taxable supplies in New Zealand to claim GST incurred on goods and services acquired in New Zealand (something that has not been possible previously). We have set out below practical points to consider surrounding the registration and refund process. 

In summary, a non-resident business will be able to register with Inland Revenue under the special GST registration if:

  • The non-resident is not carrying on or intending to carry on a taxable activity in New Zealand; and
  • The non-resident is registered for consumption tax in its own jurisdiction, or, if their jurisdiction does not have a consumption tax, is carrying on a taxable activity that would render them liable to register for GST in New Zealand if the taxable activity was carried out in New Zealand; and
  • The amount of the non-resident’s input tax in the first period is likely to be more than NZ$500; and
  • The non-resident’s taxable activity does not involve the performance of services which is likely to be received in New Zealand by a person who is not registered for GST.

Practical Issues 
Below are some of the practical points to consider regarding the special GST registration:

  • Registration needs to be completed via a paper form which will be available on Inland Revenue’s website from 1 April 2014. Additional documents such as passport photos, business numbers and bank account statements will also need to be submitted as part of the registration process;
  • The first GST return (which also needs to be completed via a paper form) must be submitted along with the paper registration form available on Inland Revenue’s website from 1 April 2014;
  • Businesses will have a special code added to their Inland Revenue records so that no correspondence will be sent regarding other tax types;
  • Physical copies of tax invoices need to be included when the first GST return is submitted and we understand that Inland Revenue will be performing strict review processes before authorising a refund;
  • Once Inland Revenue receives the GST return, it will have 90 working days to issue a refund or request further information;
  • Once Inland Revenue accepts the first GST return, businesses will be able to register for myIR (Inland Revenue’s online system) and file the GST returns online;
  • Businesses are required to file GST returns for each taxable period (i.e. 1, 2 or 6 months), including ‘nil’ GST returns, otherwise they will risk being deregistered; and
  • If the business is deregistered it will not be able to re-register for GST for another 5 years.

Please contact your Deloitte advisor for further information


Tax Alert March 2014 contents

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