PONSONBY PROFESSIONALS

PONSONBY PROFESSIONALS LOGAN GRANGER: MODERNISING GST

Changes aimed to modernise the GST rules for record keeping and invoicing are being introduced.

Some changes already came into effect on 30 March 2022 with the majority coming into effect on 1 April 2023.

The IRD have started communicating some of these changes direct to GST registered customers and are also working with digital service providers to support them with any changes that might be needed. The new rules are designed to support e-invoicing and electronic record keeping and in particular to drive change with New Zealand’s adoption of the Pan European Public Procurement Online (PEPPOL) framework.

PEPPOL is the government mandated standard for simplified electronic procurement across borders, by developing common technology standards to increase efficiencies and reduce costs.

30 March 2022 changes Previously, a tax invoice for any expenses costing more than $50 (including GST) was required to make a claim. Now if you do not receive a tax invoice, other records such as contracts, bank statements and supplier agreements are sufficient either on their own or in combination to support an expense claim.

You are still required to keep records to support the claim including a tax invoice if you receive one.

Until 31 March 2023 sellers are still required to produce tax invoices for sales costing more than $50 (including GST). Copies of any tax invoices are no longer required to be marked as “copy only”.

There are new rules for buyer-created invoices; the two main ones are you no longer need Inland Revenue approval and you no longer need the wording 'buyer created tax invoice – IRD approved' on your invoices. However, you can continue to do so.

There are some conditions that must be satisfied between the parties and these can be found using the following link. www.ird.govt.nz/gst/tax-invoices-for-gst/buyercreated-tax-invoices

There are also new rules for supplier groups and GST groups. The new rules allow two or more registered persons to form supplier groups so they can issue 'shared tax invoices' for GST purposes.

Members of supplier groups enter into an agreement stating one member of the group will issue tax invoices, credit notes and debit notes on behalf of the other members. The member responsible for issuing tax invoices, credit notes and debit notes is called the issuing member. The supplier group must satisfy some conditions and these can be found using the following link. www.ird.govt.nz/gst/tax-invoicesfor-gst/supplier-groups-and-shared-invoices

It is worth noting that supplier groups are not the same as GST groups. Starting on 30 March 2022, a member of a GST group can use either the representative member's or their own registration number on tax invoices they issue.

1 April 2023 changes New terms will come into effect. Tax invoice will be replaced by the term Taxable supply information. Debit note/credit note will be replaced by the term Supply correction information. Buyer-created tax invoice will be replaced by the term Buyercreated taxable supply information.

The definition of taxable supplies has not changed 'Taxable supply information' refers to the minimum set of information buyers and sellers need to keep as evidence of a transaction.

Taxable supply information includes tax invoices, but it can also include information held in other forms, such as supplier agreements, contracts, and bank statements.

Sellers can provide taxable supply information to a customer using an automated direct exchange between the buyer's and seller's software, for example PEPPOL eInvoicing.

Currently, a valid tax invoice must include the words 'tax invoice' in a prominent place. When the new rules come into place there is no need to change the wording of the GST documents your business uses to reflect these new terms. You may continue to provide taxable supply information in a single document marked as a 'tax invoice', however you will not be required to include this wording when providing taxable supply information.

The taxable supply information you need to provide or keep depends on the value and the type of supply. You can find more information in the IRD online tool under ''Taxable supply information (currently called tax invoices)'. The Inland Revenue plan to publish more guidance to help GST registered customers to understand the changes. (LOGAN GRANGER)  PN

Disclaimer – While all care has been taken, Johnston Associates Chartered Accountants Ltd and its staff accept no liability for the content of this article; always see your professional advisor before taking any action that you are unsure about.

JOHNSTON ASSOCIATES, 14 St Marys Bay Road, T: 09 361 6701, www.jacal.co.nz

14 St Marys Bay Road, St Marys Bay