- The Taxpayer was a GST-registered company that owned land leased to one of its shareholders.
- The Taxpayer sold the land and ceased making taxable supplies but did not de-register for GST.
- The Taxpayer incurred legal fees defending shareholder claims about apparent irregularities in its accounts.
- The Taxpayer claimed input tax deductions for legal fees incurred while not making taxable supplies.
- CCS argued the Taxpayer had no taxable activity and was not entitled to the input tax deductions.
- The Taxpayer argued it had a taxable activity and the legal fees related to that activity.
- The main issue was whether the Taxpayer was entitled to the input tax deductions.
- TCO considered whether the Taxpayer was carrying on a taxable activity and whether the legal services were used for making taxable supplies.
- Another issue was whether the Taxpayer’s GST registration should be cancelled.
- TCO concluded that the Taxpayer was not entitled to the input tax deductions.
Source: taxtechnical.ird.govt.nz
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
