What are the rules?
Marketplace operators such as Airbnb, Uber and Delivereasy (to name a few) are now required to collect and return 15% GST to the IRD, even if the underlying owner or provider of the property/service is not GST registered.
If you are a GST registered owner/service provider, then you need to let the marketplace know of your registration status. Your marketplace will return the GST on your behalf, and you can claim input tax on your expenses as you would normally do.
If you are not GST registered, the marketplace will still return GST on your behalf, but you will get what is known as a flat rate credit of 8.5% to compensate for your costs with the remaining 6.5% being passed on to the IRD.
There are some specific exemptions from these rules for large scale accommodation providers.
What some may not realise is that these rules not only apply to GST, it will also affect how you calculate your year-end income tax liability and income tax return.
So some of the questions you might need to think about may be: am I GST registered, should I be GST registered, do any of the exemptions apply to me, how do I deal with the income and expenses in my GST return, how do I deal with my income and expenses in my income tax return?
If you believe that these rules apply to you, then it is really important that you contact your PKF Kendons advisor to make sure that you are following the rules correctly going forward as not getting things right could be costly.