Credit notes and GST in New Zealand
How Inland Revenue treats credit and debit notes since 1 April 2023, and what to include when you correct an invoice.
Since 1 April 2023 credit and debit notes are covered by 'supply correction information'. You need it when the original taxable supply information had an incorrect amount of GST, or when the price changes after you issued an invoice. Common reasons are a cancelled sale, returned goods, a price reduction or a wrong GST rate. Supply correction information must show the seller's name and GST number, the date of the correction, details that identify the original invoice, and the correction itself. The seller includes the change in the GST return for the period the correction was provided. 4invoices is built for creating invoices. It does not manage GST adjustments or file returns.
- Needed when the GST amount was wrong or the price changed after invoicing.
- It must show the seller's name and GST number, the date, the original invoice and the correction.
- Both buyer and seller keep it.
- The adjustment goes in the return for the period it was provided.
How it works
Identify what changed: a cancellation, a return, a discount, an error in the description, a date or party details, or the wrong GST rate or amount.
Write the correction document. Include your name or trade name, your GST number, the date, a reference to the original invoice, and what is corrected, including any change in the GST amount.
Send it to the buyer and keep a copy. Supply correction information can also sit in the same document as a new invoice.
Include the change in your GST return for the period in which you provided the correction.
A GST-registered buyer makes the matching change in the return covering the period they received it.
Legal references
- Inland Revenue, GST guide (IR375) — supply correction information, contents and timing.
- Goods and Services Tax Act 1985 — adjustments for changes in consideration.
Frequently asked questions
Is a credit note still used in New Zealand?
Yes, as a common form of supply correction information. The formal requirement for debit and credit notes was replaced on 1 April 2023 by a requirement to provide and keep supply correction information, which can be in other forms too.
Which GST return does a credit note go in?
The seller includes it in the return for the period in which the correction was provided. A GST-registered buyer includes it in the return for the period they received it.
Can I use one to fix a very old mistake?
Inland Revenue says supply correction information cannot fix a mistake in a return after a certain period, generally four years for most GST returns. Ask a tax agent for older errors.
Does 4invoices create credit notes or adjust my GST return?
4invoices creates invoices with a GST rate per line and lets you download PDFs. It does not adjust GST returns or connect to Inland Revenue. Check with your tax agent how to record corrections, and make sure the correction shows the details above.