Confusion still lingers over changes made to New Zealand’s GST rules back in April as not all international business events qualify for the 15 per cent tax savings.
Tourism New Zealand, in partnership with Inland Revenue New Zealand, recently held a series of seminars across Australia to demystify the new rules surrounding the GST rebate and gather feedback from Australian PCOs, event management companies, corporations and associations, all of which make up Tourism NZ’s key international market.
Seminars held in Sydney, Melbourne and Brisbane were presented by Inland Revenue New Zealand’s principal advisor – GST, Jared Otto, who explained qualifying criteria, and the process for registering and claiming GST.
Mr Otto outlined the new rules are intended for overseas customers of NZ businesses and NOT overseas suppliers of goods and services which are received by customers in New Zealand.
Ultimately, the rules are designed to benefit the end-user, which in most cases is the delegate, not the PCO. However, in cases where association groups and corporates do NOT charge delegates to attend their conferences, they become the end-user and therefore also qualify for the rebate.
“We want to make these rules work in the real world,” Mr Otto said, and proceeded to explain the five key determinants as to who can make a claim:
- You must be registered as a non-resident for tax purposes.
- You must be registered for a ‘consumption tax’ (i.e. GST) in Australia.
- Your first return must include at least NZ$500 of GST (which equates to at least NZ$3834 in expenses).
- You must not undertake ‘taxable activity’ in NZ (i.e. not making supplies in NZ subject to GST).
- You are not a business that supplies services received in NZ by unregistered persons/consumers.
A main point of contention among attendees surrounded the need to register (1) and the high spend threshold required in the first return (3). Attendees at the Sydney seminar said the rules present good outcomes for corporates, but not for associations, as many are not registered; and in cases where the individual delegate is the end-user, they said the spend threshold is far too high and that logistics surrounding a large group having to make individual claims would not be feasible.
Nevertheless, both Tourism New Zealand and Inland Revenue New Zealand are intent on making the tax changes viable and hope to continue to educate the Australian meetings industry.
For more information, visit http://www.ird.govt.nz/industry-guidelines/non-res-bus-gst/