IRD determines funds management is exempt GST

The Inland Revenue Department (IRD) has finally delivered a definitive statement of how it views goods and services tax (GST) in relation to funds management.

This ends decades of confusion in which some managers have been allocating 10% of their earnings as liable for GST while others have decided 100% of their activities were liable.

Fund managers will have until April 1 next year to conform to IRD’s latest determination, called an “interpretation statement.”

Essentially, managing a fund is a financial service and financial services, including activities related to providing this service so long as they’re provided inhouse, and are therefore exempt from GST.