The Department of Inland Revenue has released a special report on the recent Taxation (Annual Rates for 2016-17, Closely Held Companies, and Remedial Matters) Act and the changes it makes to the GST treatment of services related to land.

The new rules came into force on 1 April 2017.

The changes apply GST to a wider range of services, particularly professional services, supplied to non-residents who are outside of New Zealand and which closely relate to land in New Zealand.

The new rules will similarly ensure that, when these services are provided in relation to land outside New Zealand (whether to residents or to nonresidents), they are not charged with GST.

IRD says information in its special report precedes full coverage of the new legislation, which will be published in the June edition of the Tax Information Bulletin.

The report says that by adding to services connected with land services which are “intended to enable or assist a change in the… ownership or other legal status of the land”, a variety of professional services (such as legal or real estate agents’ services as part of a land transaction) are expected to be included because the intended outcome is to change the legal nature of the land, even though the services do not involve any physical change or connection to the land.