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Technical tax area Ngā tūmomo whakataunga me ngā aratohu

GST grouping rules

Section 55 of the Goods and Services Tax Act 1985

Section 55, which governs the treatment of GST groups, has been amended to allow companies to form a GST group even if all of the members are not GST-registered. The change does not affect companies that are already grouped for GST purposes.

Key features

Section 55(1) now allows a group of companies meeting the requirements of section IG 1 of the Income Tax Act 2004 to be treated as a group for GST purposes if the total value of taxable supplies made by the companies is equal to or greater than 75 percent of the total supplies made by the group. The change allows companies that were previously unable to form a GST group to now do so and removes the GST risk associated with intra-group supplies.

A consequential change has also been made to section 55(3) to ensure that the representative member of the GST group is a GST-registered person.

Application date

The amendment applies from 1 October 2001.