The zero-rating of financial services and introduction of reverse charge in New Zealand (at last!)

The goods and services tax (GST) was introduced in New Zealand in 1986 as one of several reforms aimed at both reducing the reliance of the tax system on personal income taxation and raising additional revenue. The GST has been a resounding success ? in the 2002-2003 financial year, it contributed 21% of the total government tax revenue. This article discusses the two major GST changes enacted in November 2003, namely, the zero-rating of certain financial supplies and the introduction of the reverse charge for imported services.