A few GST reminder Tidbits

Requirement to retain copies of GST Tax invoices

Copies of tax invoices for supplies greater than $50 are required to be maintained for seven years. Otherwise, if you cannot now produce the tax invoices to support the input tax claims made, Inland Revenue may disallow those input tax deductions. The only exceptions are for second hand goods claims or when the Commissioner is satisfied that there are or will be sufficient records available to establish the particulars of any supply or class of supplies, and that it would be impractical to require that a tax invoice be issued

An occasion for a payments basis GST payer to account for GST on an invoice basis

When a supply of goods or services exceeds $225,000, the invoice for that supply must be accounted for on an invoice basis in the period when it has been issued. This is irrespective of the payment plan or when payment is received. The only exception is when there is a “short term agreement” which stipulates payment will be made within one year.

Donated goods

Donated goods are supplies, however are supplied for no consideration. Therefore there will be no GST to account for on their donation. Unfortunately, donated goods (except, mainly donated goods to the Canterbury earthquakes) are not entitled to a deduction for their cost donated.

GST on FBT

GST is calculated on the fringe benefits cost of goods and services provided to employees. Unlike GST on goods and services, the GST on fringe benefits tax supplies is not a deduction from GST, but an increase in fringe benefits tax to pay. This is as it is considered a deemed supply. However, FBT is deductible by a provider in determining its taxable income.

There are many other little bits and pieces relating to GST so if you have any questions about these or any other item, please contact us.