- New Zealand’s Inland Revenue Department issued a new interpretation statement on GST rules for fund managers’ fees.
- The statement addresses GST treatment of fees paid to fund managers, outsourced administrative services, and outsourced investment management services.
- Fees paid to fund managers for services to investors or the fund are exempt from GST as they are considered financial services.
- Outsourced administrative services provided by third parties are taxable as they are not classified as financial services.
- Outsourced investment management services can be exempt or taxable based on the investment manager’s authority and oversight level.
- If a third-party investment manager has authority to make investment decisions, it is an exempt supply of financial services.
- If the manager can veto investment recommendations, the service is considered taxable investment advice.
- A manager’s right to veto may still classify the service as an exempt supply of arranging financial services.
Source: answerconnect.cch.com
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.
