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Inland Revenue

Tax Policy

PUBLISHED 2 August 2004

GST reforms to apply from 1 January

Changes zero-rating business-to-business supplies of financial services and applying the new GST reverse charge to certain imports of services will come into force on 1 January 2005. The application date was left open when the changes were enacted last year, to allow affected parties time to make necessary systems changes. The date was set today by Order in Council. For more information see the government's media statement.

Draft guidelines on how to work with the new rules have been released for purposes of consultation. Submissions close on 3 September. See “GST and financial services: draft guidelines for working with the new zero-rating rules” (DOC 498KB, PDF 106KB) and “Draft GST guidelines for recipients of imported services” (DOC 270KB, PDF 101KB).

Hon Dr Michael Cullen
Minister of Revenue


GST reforms to apply from 1 January next year

Major GST changes relating to financial and imported services will come into force on 1 January 2005, the Minister of Revenue announced today.

The date was set by Order in Council today.

"Legislation to better align the GST treatment of the financial services sector with that of other industries and to introduce a reverse charge to tax certain imports of services was enacted last year but the application date was left open to give affected taxpayers time to make the necessary systems changes.

"From 1 January, business-to-business supplies of financial services, which have been exempt from GST, will be zero-rated for GST purposes. As a result, banks and other financial institutions will be allowed to recover GST on purchases related to the supply of their services to businesses.

"Also from 1 January, the new reverse charge will tax certain imports of services, to alleviate the bias against services supplied by New Zealand residents that are subject to GST. Registered recipients of supplies of imported services will have to add GST to the price of imported services if the same services would have attracted GST if supplied in New Zealand.

"Examples of imported services that will be affected by the new charge include management, legal and accounting services and new software installations, Dr Cullen said.

Draft guidelines on how to work with the new rules are available at

Contact: Patricia Herbert [press secretary] 04-471-9412 or 021-270-9013. E-mail: [email protected]
Technical inquiries to Helen Mackenzie [tax adviser, Dr Cullen’s office] 471-9728