Further to our previous more general blog posts, we have now been provided further details on getting JDE ready for the GST increase from 12.5% to 15% that will occur in New Zealand on 1 October.

Inland Revenue have confirmed our previous general comment that for most JDE customers the standard time of supply rules will apply.  Which, in its most simple form, means that transactions dated up to 30 September should have GST applied at 12.5%, whereas transactions dated on or after 1 October should have GST applied at 15%.  We can help you with the simple configuration required in JDE to make this happen.

There are two scenarios identifed by Inland Revenue which are potential exceptions to this rule that we think could be relevant to how JDE is configured:

1. credit notes issued after 30 September against invoices issued prior to 1 October should have GST applied at the original 12.5% rate - for JDE customers on more recent releases (8.12 onwards) there is an option to make this happen automatically (we can check for you if this option has been set correctly in your system) but those JDE customers on earlier releases (prior to 8.12) will need to work out the best way to handle this scenario (we can help with this);
2. annual contracts involving successive supplies - there are a number of options on how to handle the GST portion so please contact us for advice if this is a scenario you encounter in your business.

We note that the government is also passing a legislative amendment to the GST Act to legitimise the common practice of issuing invoices early in the month that cover goods or services provided in the previous month and are dated as at the end of the previous month.  Technically (without the legislative amendment) such invoices prepared in early October but dated late September should have GST applied at the new 15% rate as under the time of supply rules they are 'issued' in October even though they are dated in September - but the legislative amendment will allow GST to be applied at 12.5% providing they are issued on or before 11 October.

Oracle have also advised us to look out for the following scenarios (again, we can help you plan for these scenarios if they are relevant to your business):

• Adjustments in (or after) October relating to pre October 12.5% GST transactions;
• Prepaid and orders booked prior to October invoiced post 30 September;
• Credit notes processed post 30 September relating to pre October 12.5% GST transactions (see above);
• Settlement Discounts including GST taken up post 30 September relating to pre October 12.5% GST transactions;
• GST on Merchant fees recognised post 30 September relating to pre October 12.5% GST transactions.

If you would like help with planning for, or making, this change please contact Gavin Knight - our Director of Business Consulting - by phone (021 428 059) or by email.

Please note that the above is not intended to be legal or tax advice - please consult your legal or tax advisor for such advice on how the GST increase will affect your business.