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Published:January 10, 2023

New Zealand - GST invoicing changes from 1 April 2023

Are you playing by the (new) rules? Changes regarding GST invoicing will come into effect from 1 April 2023 for GST-registered businesses in New Zealand. Here’s what you need to know about the new terminologies and how the processes could impact your business. 

New Zealand - GST invoicing changes from 1 April 2023

During 2022, GST-registered businesses in New Zealand experienced several changes concerning invoicing and recordkeeping requirements. However, what's less obvious is the challenging task of keeping up to date with the most recent legislation and what it means for your business. 

Here's how to prepare for the new framework regarding GST information requirements before 1 April 2023. 

Understanding the timeline

In March 2022, New Zealand enacted new GST invoicing rules. These rules will take effect from 1 April 2023. However, in September 2022, several corrective GST changes were introduced to amend the initial rules. So, what's the latest regarding current tax invoicing rules, and how should you approach the new framework as a GST-registered business? 

The impact of new information requirements on a GST-registered business

Fortunately, the new changes are not asking businesses to change their entire invoicing system. Therefore, most GST-registered businesses should be able to continue issuing tax invoices and GST credit notes as usual. However, this does not mean that you will be completely unaffected. 

The new rules allow a wider variety of invoicing practices. This means that any change could have a ripple effect and directly influence the way you do business. For example, these changes could change how your suppliers issue invoices, impacting your business operations. 

Key takeaways from the GST invoicing changes

The changes concerning GST invoicing covered the following core takeaways: 

  1. The introduction of new terminologies to support a less restrictive recordkeeping process.
  2. Additional tax invoicing processes for GST group members and supplier groups. 
  3. A 28-day deadline for providing GST-registered customers with information regarding taxable deliveries for supplies worth more than NZD 200. 

Unpacking new terminologies

The new terminologies include Taxable Supply Information (TSI) and Supply Correction Information (SCI).

Taxable Supply Information (TSI) and Tax Invoices

After 1 April 2023, Taxable Supply Information (TSI) will replace tax invoices. This means that instead of issuing a 'tax invoice,' businesses can provide GST information in their preferred format, as long as it classifies as TSI. 

TSI refers to a list of information you must provide GST-registered customers. Although businesses can choose to keep issuing tax invoices, these invoices should contain all required GST information as per TSI conditions. Most of the required GST information should already be included in your current tax invoice.

To claim GST, customers must store the TSI. In addition, if a business receives a request for TSI, it must be issued within 28 days of the request. It's also important to note that businesses do not need to issue TSI to customers who are not registered for GST or for transactions where the amount charged is under NZD 200 (including GST).

Supply Correction Information (SCI) and credit/debit notes

Starting in April 2023, SCI will replace credit and debit notes. Essentially, SCI is a list of information that a business must provide a GST-registered customer in case of an error in the TSI. SCI can be issued in any format and can be used to correct a variety of errors, such as 

  • Incorrect supply description
  • Incorrect amount charged
  • Incorrect GST rate
  • Cancellation of supply

The new rules include no specific time required to issue SCI. However, you must store any SCI in case of a GST claim. As with TSI, businesses may issue credit or debit notes as long as it includes the required GST information. 

Additionally, if the error in the TSI has no impact on the GST, you do not need to issue SCI. 

Tax invoicing processes for members of GST groups

As of April 2023, if you have a GST group, you can choose one of the following options:

  • The GST group member can continue to issue tax invoices or provide TSI under their name and registration number. 
  • GST groups can provide a tax invoice or TSI under a GST group representative's name and registration number. 
  • GST groups can issue tax invoices or TSI under another entity's name. This entity is neither a GST representative nor the member making the supply. In this case, New Zealand’s Inland Revenue Department (IRD) may need to be notified.

Find the right invoicing process for your business

As the new rules provide a more flexible approach to GST invoicing and recordkeeping, creating a process that works best for your business can take time and effort. Rather than relying on trial and error, contact experts who will guide you through the entire VAT process to guarantee easy, simple and effective recovery. 

Get in touch with us here: https://vatit.com/contact-us/ 

 

 

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