GST Input Tax Deductions and Registration: A New Zealand Case Study

• A New Zealand company leased land to a shareholder and later sold it.
• The company stopped making taxable supplies but didn’t de-register for GST.
• The company claimed input tax deductions for legal fees incurred while not making taxable supplies.
• The Customer and Compliance Services argued the company had no taxable activity and shouldn’t claim deductions or remain registered for GST.
• The company argued it always had taxable activity and the legal fees related to that activity.
• The Tax Counsel Office found the company wasn’t entitled to the deductions and its GST registration shouldn’t be cancelled.

Source: news.bloombergtax.com

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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