Input tax available for imported goods

2012 amendment reinforces the policy that an input tax deduction should not be available in some circumstances including the delivery of goods to a person in NZ.

Sections 3A(4) and 20(3C) of the Goods and Services Tax Act 1985

Before the introduction of the new apportionment rules, the definition of "input tax" did not apply to the delivery of goods to a person in New Zealand. This ensured that, for example, a courier firm was not able to claim input tax in respect of imported goods when they merely arranged delivery of the goods in New Zealand.

As a result of the changes to the wording of the definition of "input tax" to accommodate the new apportionment rules, the restriction on the ability to claim input tax was inadvertently removed. A registered person could arguably claim input tax deductions in respect of GST paid in the process of delivering the goods to a person in New Zealand. This amendment reinforces the existing policy that an input tax deduction should not be available in these circumstances.

Application date

The change applies from 1 April 2011.