New Zealand

Details

  • Service: Tax
  • Type: Business and industry issue
  • Date: 6/05/2012

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  John Cantin

John Cantin

Partner, Tax

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Tax

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Submission – GST treatment of transitional services: sale of a business 

GST treatment of transitional services supplied as part of sale of a business (that includes the supply of land)

 

Inland Revenue’s draft QWBA concludes that where transitional services are provided by the vendor as part of the sale of a business (that includes the supply of land), the transitional services can only be zero-rated, for GST, where the services are part of the same supply as the supply of the business/land. 

The statement concludes that the transitional services will only be part of the same supply (and therefore zero-rated) where “they provide merely ancillary, incidental, minor or peripheral benefits and are not in any real or substantial sense part of the consideration for which the payment is made”.

 

We believe that such an approach is not correct in terms of the law and the policy intent, and would lead to practical difficulties in its application.

Tax submissions - Submissions on draft tax legislation, Government discussion documents and issues papers, & various tax interpretation statements released by the New Zealand Inland Revenue. 

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