6.2 GoodsandServicesTax%28ppt%291.ppt

6.2 GoodsandServicesTax%28ppt%291.ppt - ACIS 254: ACIS...

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1 ACIS 254: ACIS 254: Introduction to Taxation Introduction to Taxation Andrew Maples Senior Lecturer in Taxation and Business Law Department of Accounting & Information Systems, University of Canterbury, Christchurch
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2 Outline of Lecture - GST Outline of Lecture - GST Introduction Requirement to register Important Definitions Who pays the tax Taxable Activity Supplies including going concerns Accounting for GST Second-hand goods, cancellation, associated persons & avoidance
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3 Introduction Introduction Why have goods and services tax (GST)? 1. It broadens the tax base, ie more aspects of economic activity are caught in the tax net. Reduces reliance income tax 2. It has a simple flat rate (but it is regressive). 3. It is an excellent source of revenue (19% of total tax collected). 4. It is less easily evaded than income tax (tax invoices required for claims and consumers must pay the GST to get a receipt).
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4 Introduction Continued Introduction Continued GST is imposed on all goods or services supplied (excludes exempt supplies ) in NZ by a registered person in the course or furtherance of a taxable activity . Also levied on imports into NZ. Consumption tax - cost borne by the final consumer. Charged at the rate of 12.5 percent (originally 10%) on a comprehensive range of goods and services (both NZ made and imported) as from 1 October 1986.
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5 Introduction Continued Introduction Continued Price described as “GST inclusive” = price includes GST (eg $1,125 GST inclusive ). To calculate the GST component, divide the GST inclusive price by 9 (eg $1,125/9 = $125 GST). Price described as “GST exclusive” = price excludes GST (ie $1,000). To determine the GST to add to a GST exclusive price, multiply the price by 12.5% ($1,000 x .125=$125 GST).
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6 Registration Registration GST is charged on supplies made by a registered person If carry on taxable activity and annual taxable supplies exceed $40,000: must register for GST. Note: threshold increase to $60,000 from 1 April 2009. Below this: option of supplier whether they register. Fines for failing to register within 21 days of knowing when supplies exceed registration threshold (see s. 51 GST Act). No requirement to register if taxable supplies exceed $40,000 [$60,000] solely as a result of: 1. Ceasing to carry on a taxable activity 2. Substantially and permanently reducing size and scale of operations: extra sales of stock/plant; 3. Capital asset being replaced.
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Important Definitions Important Definitions 1. Goods - All personal and real property but does not include choses in action (personal right of property which can only be enforced by taking legal action) or money or (from 1 January 2005) supplies of imported digitised products. 1.
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6.2 GoodsandServicesTax%28ppt%291.ppt - ACIS 254: ACIS...

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