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KPMG Comment on GST transitional changes
Please find attached KPMG Taxmail on the Government's announcement yesterday regarding GST transitional changes.
The Government announced that draft legislation will be included in the Taxation (Annual Rates, Trans-Tasman Savings Portability, KiwiSaver and Remedial Matters) Bill to ease the transition for businesses into the 15% GST rate. Feedback on the proposals is requested by 16 August.
The changes, recommended by the GST Advisory Panel, should help businesses to better transition to the new GST rate in the short timeframe imposed. They include concessions for various supplies (e.g. insurance premiums, finance leases, etc) that span 1 October 2010 and also changes to simplify GST administration (e.g. the ability to issue replacement invoices).
However, some of the concessions may still create problems for businesses to grapple with. It should also be noted that these concessional provisions are elective on the part of business, which means that there will be a cost/benefit trade-off for businesses to consider.
As with any set of tax changes, the devil will be in the detail. Over the coming days, KPMG will be working through the draft legislation to ensure these amendments are workable.
taxmail_issue_2__August_2010.pdf
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