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GST (Goods and services tax) Te tāke hokohoko

Apportionment methods

There are three apportionment methods:

You must choose a method that ensures a fair and reasonable result.

Direct attribution

Direct attribution means splitting the use of goods or services between the taxable use and any private or exempt use. You can use this method for calculating both private and exempt use.


Direct attribution would be used if part of a home is set aside for business use, for example, as an office.  The percentage of the office floor area compared with the whole house area is used to apportion the house expenses.


In some cases, we'll accept an estimate of the business and private or exempt split. However, this must be backed by acceptable reasons.

Use of a motor vehicle for both private and business purposes

If a motor vehicle is used for both private and business purposes you must keep a logbook for a minimum of three months to work out the business and private use of the motor vehicle.

You can use the result of this three-month record to make claims for the business share of your vehicle expenses over the next three years. This is provided that your business use of the vehicle doesn't change by more than 20%. If this happens, you'll have to keep a logbook again for another three-month period.

Turnover method

The turnover method is used for calculating use of exempt supplies only. You cannot use it for calculating private use. The formula to calculate the use of exempt supplies is:

[Total value of exempt supplies for the period] divide by [total value of all supplies (excluding GST) for the period] x 100

The result is the percentage of total supplies that are exempt.

If your income includes interest earned from money paid in advance, and you must pay interest to people who own the money, the total value of exempt supplies may be a net figure.

Example: Calculating net exempt supplies

Solicitor's trust account

Interest received from advances


Minus interest paid to account holder


Equals net exempt supplies



This net figure can be used in working out any apportionment of office expenses.

Special method

If the turnover or direct attribution methods are not suitable, you may devise and use an alternative method. You need approval from us to do this. Please send us your application in writing.

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