Generally, a person who is registered for GST on a payments basis can claim input tax deductions only when and to the extent that payment has been made. This includes goods purchased under a standard sales agreement or goods purchased on a ‘buy now, pay later’ basis.
However:
- If a person has entered into a hire purchase agreement for the purchase of goods, they can claim a full input tax deduction when they enter into the agreement.
- If a person has entered into a layby sales agreement for the purchase of goods, they can claim an input tax deduction only when property in the goods is transferred, typically after the final payment has been made.
Source – IRD – New Zealand
