Modernising information requirements for GST

The Taxation (Annual Rates for 2021-22, GST, and Remedial Matters) Bill (the “Bill”) introduced on 8 September 2021, was reported back to Parliament on 8 March 2022.

The Bill contains proposals to modernise GST information requirements. We summarise below some of the key changes which may impact your business. Most of these changes are expected to take effect from 1 April 2023.  

From 1 April 2023, tax invoices will be replaced by “taxable supply information” (“TSI”), which is a prescribed list of information that must be provided to your GST registered customers. 

Most businesses will need to amend their tax invoices and credit / debit notes to include additional details to satisfy the new TSI requirements. For example: 

• instead of showing “date upon which the tax invoice is issued” (in accordance with the current requirement), TSI will instead need to include “date of the supply”, referring to when the time of supply is triggered 
• for supplies over $1,000, TSI must also include the recipient’s address of a physical location if that information is available to the supplier
• for GST groups, in addition to showing the supplier’s name and registration number, TSI will also need to include the GST group representative’s name and registration number.

For supplies over $200, it will be mandatory to issue TSI to GST registered customers within 28 days of the “date of the supply”.  If this is not practicable, the parties will have an option to agree on an alternative date to issue TSI.  

Supply correction information (“SCI”), replacing the current credit notes / debit notes, can be issued in a wide range of circumstances considered to be “inaccuracy”. 

In addition to the situations currently triggering a credit note / debit note, the scope of SCI also includes other instances of inaccuracy, such as an incorrect description of the supply, an incorrect place of supply, an incorrect time of supply, an incorrect description of the supplier or recipient of the supply. 

In addition to some of the current content requirements of credit notes / debit notes, SCI will need to include “information identifying the TSI” to which the SCI relates.  Further the SCI will need to specify the “correction to the TSI”.

The issue of SCI will be mandatory and must be done within 28 days of the TSI, or by an alternative date agreed with the recipient, if the inaccuracy is in respect of the GST amount charged on the TSI, or the inaccuracy has otherwise resulted in an incorrect amount of GST being recognised.  Under the current rules, there is no time frame as to when the credit / debit note must be issued in similar circumstances.  

The new record keeping requirements have been substantially simplified since the initial introduction of the tax bill. For most businesses, they are only required to keep a record of the TSI and SCI for all taxable supplies made and received. There are specific record keeping rules applying to supplies that are not normally taxable supplies, including imported supplies, second-hand goods, supplies to nominated recipients. GST groups are also subject to additional record keeping requirements.

For supplies lower than $200, TSI is not required to be issued, but to claim GST, TSI must be sought from the supplier. TSI for supplies under $200 must include name and the GST registration number of the supplier, the date of the supply, a description of the goods or services and the amount of the consideration for the supply.

• You will need to review the supplies and identify situations where tax invoices are not issued within 28 days of the GST time of supply. We suggest you review the GST time of supply rules applicable to your transactions. We can provide further advice on this.  
• The current processes for issuing credit notes / debit notes should also be reviewed to determine if any adjustments are required for these documents to be used as SCI after 1 April 2023. For example, you will need determine in what situations a credit note / debit note is typically issued? Can these documents be easily linked to the original invoice, as required under the new rules?
• You will need to identify instances where an agreement may need to be entered into with your customers after 1 April 2023 to agree on an alternative date to issue TSI or SCI. We suggest any time your customer contract is subject to renewal / review in the next 12 months, consideration is given to whether a TSI / SCI clause should be included regarding the agreed time to issue TSI / SCI.
• You will need to review the GST documentation you currently issue to your customers and determine the extent to which the content of the document will need to be amended to comply with the new rules, and whether Inland Revenue approval is required to be exempt from the TSI / SCI requirements.
• Consider providing training to your Accounts Payable team on the TSI rules so that they are familiar with the new content requirements. Under the new rules, no GST can be claimed unless TSI has been obtained from the supplier. Further, your accounts payable team will also need to be familiar with the process to issue SCI if an error in the TSI is identified.  

The above summary does not cover all the new GST information requirements. We would be more than happy to arrange a meeting with you and your team to go through these changes in more detail to help you work through the practical implications of these changes to your business.