New Zealand: GST Billing Modifications Effective April 1, 2023
January 9, 2023
New Zealand companies that are registered to collect GST will need to make some adjustments to the way they bill customers beginning on April 1, 2023. Here's what you need to know about the new terms and how they may affect your business.
Many New Zealand firms that are registered for GST had their billing and recordkeeping practices altered in 2022. More complicated is how hard it is for businesses to keep up with changing rules and what they mean for them.
Understand the New GST Invoicing Timeline
New Zealand has revised GST billing regulations for March 2022. After 1 April 2023, these regulations will become binding. On the other hand, a number of GST regulation adjustments were implemented in September 2022. So, what's new with tax invoicing regulations, and how should your GST-registered company adopt the new framework?
Impact of New Information Requirements on Your Business
Fortunately, the new regulations do not mandate that companies completely revamp their billing procedures. For the most part, tax invoices and GST credit notes may be issued normally by GST-registered enterprises. But it doesn't imply you won't feel anything at all.
The new regulations open the door to a larger range of billing arrangements. In other words, each alteration may cause a chain reaction that affects your operations. It's possible, for instance, that this will affect the way your suppliers bill you.
Important Lessons Learned From GST Pricing Shifts
The following are some of the most important modifications that have been made to GST billing:
Using new jargon to facilitate less cumbersome documentation of events.
GST group members and supplier groups need supplementary tax invoicing procedures.
A 28-day deadline for providing information about taxable deliveries to GST-registered customers for supplies worth more than NZD 200.
Explaining Recent Jargon
Some examples of the new jargon include Supply Correction Information (SCI) and Taxable Supply Information (TSI) (SCI).
Information on Taxable Supplies (TSI) and Tax Receipts
Invoices will be obsolete as of 1 April 2023, when Taxable Supply Information (TSI) will take their place. As long as the information is treated as TSI, firms don't need to issue "tax invoices" to supply GST details.
Customers who are registered for GST must be given a set of mandatory details known as TSI. A company is not obligated to stop generating tax bills if doing so would help them comply with TSI criteria; nevertheless, if they do, such invoices must include all GST information that is necessary. Your existing tax invoice should already include most of the needed GST information.
Customers must keep the TSI in order to make a GST claim. In addition, a company is obligated to issue TSI requests within 28 days. Remember that companies are not required to provide TSI to customers who are not GST registered or for transactions where the amount charged is less than NZD 200 (including GST).
Credit/Debit Slips and Supply Correction Information (SCI)
Credit and debit notes will be phased out and replaced with SCI beginning in April 2023. SCI is essentially a checklist of corrections that a company must make to a GST-registered customer's TSI. There are many types of mistakes that can be fixed using SCI, and they may be provided in any format.
Incorrect supply description
Erroneous amount charged
Incorrect rate of GST
There is no time limit for issuing SCI under the new standards. You must, however, keep any SCI in case of a GST claim.
Businesses like TSI can issue credit or debit notes as long as they include the right GST information.
Furthermore, if the TSI fault has no effect on the GST, you do not need to issue an SCI.
GST Group Members' Tax Invoicing Procedures
If you have a GST group as of April 2023, you may choose one of the following options:
The GST group member may continue to issue tax bills or offer TSI under their name and under their registration number.
GST groups may issue a tax invoice or TSI in the name and registration number of a GST group representative.
GST groups may issue tax invoices or TSI in the name of another company. This entity is neither a GST representative nor a supply member. In this instance, the Inland Revenue Department (IRD) of New Zealand may need to be contacted.
Determine the Best Invoicing Procedure for Your Business
Because the new laws allow for greater flexibility in GST billing and recordkeeping, developing a method that works best for your company might require time and effort. Instead of relying on trial and error, consult with specialists who will walk you through the full VAT procedure to ensure a straightforward, uncomplicated, and efficient recovery.