Goods and services tax - zero-rating of services related to land

This Interpretation Statement concerns a recent amendment to the Goods and Services Tax Act 1985. The amendment relates to the circumstances in which services related to land can be zero-rated under s 11A(1)(e) and (k). Broadly, s 11A(1)(k) provides that services that are supplied to non-residents who are outside New Zealand at the time the services are performed are eligible for zero-rating if they are not either: directly in connection with land in New Zealand, or in connection with land in New Zealand and intended to enable or assist a change in the physical condition, ownership or other legal status of that land. There is a corresponding rule in s 11A(1)(e) for services supplied in relation to land outside New Zealand. This item sets out the Commissioner’s views on the 'directly in connection with' test and the new test.