GST and the credit card fee

2012 amendment clarifies that fees charged under the Tax Administration Act 1994 are applicable for GST, and the amount set in legislation is GST-exclusive.

Section 226C(3) of the Tax Administration Act 1994

An amendment has been made to clarify that fees charged under section 226 of the Tax Administration Act 1994 are applicable for GST, and the amount set in legislation is GST-exclusive.

Background

Section 226C of the Tax Administration Act 1994 allows the Commissioner of Inland Revenue to charge taxpayers a fee, if they choose to pay their tax and social liabilities by credit or debit card. The fee is set at 1.42% of the total transaction and may be changed by Order in Council.

This fee will not apply to overseas-based student loan borrowers and overseas-based child support liable parents who choose to make their payments by credit or debit card.

Key features

The amendment to section 226C of the Tax Administration Act 1994 makes it clear that if any GST is payable on the credit card or debit card service fee, the amount set in legislation is exclusive of GST.

Application date

The amendment applies from the date of Royal assent, being 2 November 2012.