IRD GST changes
You might have received an email from the IRD recently about changes to GST. You may have given it a cursory glance before deleting, or not read it at all. Well, some of the information contained in this email could have been relevant. The notification related specifically to sales invoicing however, earlier this year, the IRD made some other GST changes. Specifically, the changes were targeted to make things easier for GST registered individuals and entities.
The changes can be categorised into 3 main areas – documentation requirements for expense claims, buyer-created tax invoices, and groups. The latter two aren’t typically used by not for profit / for purpose entities, so this piece will focus on documentation requirements.
GST documentation for expense claims
We know the rules – thou must keep 7 years worth of tax invoices in case requested by the IRD. Side note – did you know that GST has always been able to be claimed without an invoice or receipt if the cost is less than $50? Anyway, the GST changes featured by the IRD have flipped the narrative that a valid tax invoice must always be held in order to make a GST deduction.
The IRD have responded to the changing times, including the mass use of cloud based accounting and the ability to capture key information in real time digitally. Now, so long as certain amounts of information are kept, you don’t need to insist on receiving a tax invoice. Note though – if you do receive a tax invoice, you need to keep it. Luckily the likes of Xero allow most types of attachments to be dragged into each transactions. Xero also has a file storage area in addition to this.
If you need clarification on what information needs to be captured, feel free to reach out for more detailed support.