ACCT254 Final

    Cards (93)

    • Why have GST
      Broadens tax base
      Reduces reliance on income tax
      Excellent source of revenue
      Difficult to evade
      Regressive
      Cost bourne by final consumer
    • Registration
      If taxable activity exceeds $60,000 = must register for GST (on regular business transactions/activities) (s 51)
    • Goods
      all personal and real property NOT chosen in action, money, cryptoassets/currency, product transmitted by cable (s 2 GSTA)
    • Services
      anything that is NOT goods or money or cryptocurrency (e.g. chose in action, service transmitted by cable) (s 2 GSTA)
    • Output tax
      GST added to supplies of goods/services made by registered person. Payable to IRD
    • Input tax
      GST charged on goods/services acquired by a person. Subtracted from GST payable
    • Supply
      All forms of supply
    • Supplier
      NZ resident or provides goods and services in NZ
    • Reverse charge
      GST charged on imported goods
    • Remote services
      Non-resident businesses that supply qualifying remote services are required to register and charge NZ GST
    • List of qualifying remote services
      - digital content
      - Games, apps, software
      - Webinars and distance learning
      - Online gambling
      - Legal, accounting, insurance, consultancy fees
      - Web desing/publishing
    • Low value imported goods
      applies to goods valued below $1000
      If sales exceed $60,000, even supplier outside NZ must register for GST
      No GST on B2B transactions
    • Distantly taxable goods
      moveable personal property (excl. alcohol and tobacco) outside NZ at time of supply
    • Difference between exempt and zero rated supplies
      Exempt = no GST charged
      zero-rated = GST can be claimed
    • Sale term agreements
      "plus GST if any" = permits GST to be added to the sale price should sale not be zero-rated
      "GST inclusive" = GST calculated as agreed purchase price (x3/23)
      "GST exclusive" = same as GST incl.
    • Taxable periods
      s 15 GSTA
      one month, two month, six months - taxable supplies must not exceed $500,000
    • Going concern (definition)
      s 2 GSTA
      - supply of taxable activity or part thereof which is capable of separate operation AND
      - all (or substantially all) of goods and services necessary for continued operation of that taxable activity
      - supplier carries on activity until time of transfer
    • Going concern transaction requirements
      s 11 (1) (m) GSTA
      - supply between registered persons
      - taxable activity is a 'going concern' (s 2 GSTA) at time of supply
      - Agreed by supplier and purchaser in writing that supply is going concern
      - supplier and purchaser intent that supply is capable of being carried on by purchaser as going concern (case law: indicates that same taxable activity does not need to be carried on after transfer)
    • Time of supply
      earlier of invoice or payment
    • Second-hand goods
      s 2, 20 (3) (a) (ia)
      Unregistered seller sells to registered
      No GST included in price, BUT registered can claim x3/23 of price as input tax
      Different treatment if sale is to associated person
    • Associated person
      s 9 (2), 10(3) GSTA
      Value of supply should be based on market value of an arm's length transaction
      To prevent inflation of GST refunds, deferral of GST payments etc
    • Land transactions
      Must zero rate if:
      - supply wholly/partly consists of land AND
      - is made to another registered person AND
      - recipient acquired goods with intention of making taxable supplies AND
      - supply is NOT intended to be principle place of residence for recipient
    • Land defined
      s 2(1) GSTA
    • Taxable activity
      s 6 GSTA
    • Anti-avoidance
      (s 74)
    • Zero rated supplies
      s 11, 11a, 11ab, 11b, 11c GSTA
    • Major changes to tax invoice requirements from 1 April 2023
      Name and GST registered number on all invoices now only required on invoices > $1000
      Amount of GST charged only required on invoices > $200
      Address of recipient only needed on invoices > $1000
      Name of recipient and volume/quantity of goods now not required on ANY invoice
    • What is a fringe benefit?
      s BE 1 (4)
      A non cash benefit received by an employee as a consequence of their employment
    • Employment relationship
      Crucial in determining fringe benefit. 'in connection with employment' from employer to employee. Use of third party still caught, as well as associated person, and includes future and past employees.
    • Categories of fringe benefits

      Private use of motor vehicles
      Low interest loans
      Subsidised transport
      Payment of insurance
      Non-montary contributions to super schemes
      Any 'unclassified' benefit
    • Definition of vehicle
      s 2 Land Transport Act
      Includes most motorcycles, scooters, mopeds, cars, light trucks.
      Excludes vehicles with gross laden weight exceeding 3500 kgs
    • FB of vehicles: exemptions
      Work related vehicles
      Business trips
      Emergency call outs
      When vehicle is NOT available for private use (i.e. ina garage getting repaired)
    • Requirements for WRV
      Not a car
      Employer's name prominently and permanently displayed
      Not available for private use EXCEPT travel to and from home and incidental travel for employment
    • Car defined

      By IRD
      A vehicle that is not designed to take passengers
      Must be substantially/permanently modified to NOT be considered a car
    • CIR v Ragdoll
      Modification to hatchback (i.e. folding down seats and inserting a plywood cover) = not a car
    • Calculation of benefit (vehicles)

      days x Schedule 5 Amount / 90 - employee contributions
    • schedule 5 amount
      5% GST incl cost per quarter
      9% GST incl adjusted tax value per quarter (min amount $8333)
    • Calculation of FBT (vehicle)

      taxable value of FB x FBT rate
    • Low interest loans
      If interest rate is less than prescribed rate = FB
    • Calculation of FBT (loan)
      find taxable value of loan
      then taxable value x FBT rate
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