Tax Watch: 4 June 2026

GST treatment of low value pre registration acquisitions

A Commissioner’s statement has been issued by Inland Revenue to set out its operational approach to claiming input tax on goods and services worth $10,000 or less (excl GST) acquired prior to GST registration. It clarifies expectations for eligibility, timing, and supporting documentation. This applies from 22 May 2026, particularly for new GST registrants and first GST returns.

GST: Court awarded costs and disbursements

The interpretation statement about the GST treatment of court awarded costs, disbursements, and related settlement payments has been finalised by Inland Revenue. The key issue is whether the payments constitute consideration for a taxable supply, which directly impacts GST output and input positions.

GST treatment of arranging and brokering financial products

A new draft interpretation statement outlines IRD’s view on how GST applies to intermediaries and brokers of financial products, and when their services qualify as GST exempt “arranging” of financial services rather than taxable advice. It clarifies key concepts including the meaning of “arranging”, and how to distinguish it from advisory services.

Consultation: Current GST issues

Last month officials released a GST issues paper for consultation, particularly tackling areas where the legislation doesn’t reflect the underlying policy intent, and where technical changes could improve the operation of the overall system. It outlines a range of technical and policy matters including supplies, apportionment, and sector specific anomalies which may form part of Inland Revenue’s current GST reform pipeline. Submissions close 29 June 2026.

FBT health or safety exclusion

Guidance has been issued by Inland Revenue about when the Fringe Benefit Tax exemption for health or safety benefits applies. The statement emphasises a clear nexus must exist between the benefit provided and the employer’s obligations under the Health and Safety at Work Act. There is an acknowledgement that EAP services provided to employees and extended to family will fall within the health and safety exemption. It clarifies that general-purpose wellness resources for example, via an on-line platform, would not be exempt.

Living trust, bare trust, distributions

Inland Revenue’s latest technical decision summary covers a private ruling involving a living trust deed amendment, a bare trust issue, and the later distribution of trust assets to a specified beneficiary after the last trustor dies. It required an analysis of the legal rights and obligations of a trust created offshore, to determine whether (and at what stage) it would be considered a trust for NZ tax purposes. The outcome was that there was no trust for NZ purposes until the last surviving trustee dies, at which point it was a bare trust (based on the Trust deed). This meant there was no distribution from a foreign trust received by the NZ beneficiary, rather the assets they received were treated as an inheritance.