New Zealand Tax Agency Issues Technical Decision Clarifying GST Treatment for Private Recreational Activity

The New Zealand Inland Revenue June 15 issued Technical Decision Summary No. 22/09, explaining the GST treatment for private recreational pursuits or hobbies. The taxpayer was a GST-registered horse racing syndicate, formed by a company that bred, leased, and sold racehorses. The issue was whether the taxpayer was carrying on a taxable activity. The tax counsel clarified that: 1) the taxpayer was not carrying on a taxable activity because the taxpayer was not formed for the purpose of profit and its activity was essentially carried on as a private recreational pursuit or hobby; and 2) the taxpayer didn’t fulfill the ...