Yesterday the IRD published an update on where they are at with deciding whether bodies corporate can or must register for GST.
In their May 2013 Issues Paper IRD suggested bodies corporate can register for GST and must register if the levies they charge owners exceed $60,000 per year. However they asked for feedback by 18 June.
They haven’t reached a conclusion yet and as a holding pattern have now stated bodies corporate are not required to register for GST but may choose to register.
I’m not going to get into whether or not bodies corporate are entitled to register for GST. The IRD quite rightly point out the issues are complex and any body corporate considering registration must take into account a number of implications.
However, what I do find intriguing, and to be honest quite welcome, is the IRD’s willingness to come out with a clear statement saying certain taxpayers are not required to register for GST in the meantime, even if the GST legislation requires them to.
The fact is the GST Act determines whether a body corporate is required to register, not the IRD. However, this is an area where many people have not been sure about the legal requirements. There is case law and expert opinion on both sides of the argument.
This sort of uncertainty is undesirable and it’s fair enough in my view that the IRD take steps to let taxpayers know where they stand. While this is ironed out and until the IRD has reached what will no doubt be a carefully considered view it is quite appropriate that they provide some clarity for those bodies corporate who might be worried they are not currently in compliance with the law.
Barrister, Director and Consultant specialising in tax, family enterprise governance and succession, helping start ups and entrepreneurial enterprises grow safely and international expert on value added tax policy and implementation.