Section RC 19 — Income Tax Act 2007: Disposal of assets

RC 19 Disposal of assets When this section applies (1) This section applies if, as part of the taxable activity of an entity referred to in section RC 16(2) and (3) , a person who is liable to pay provisional tax, disposes of an asset— (a) that is not revenue account property; and (b) the value of the supply of which is not less than the greater of— (i) an amount equal to 5% of the total taxable supplies of the business for the previous 12 months; or (ii) $1,000. Adjustment to GST ratio for current and next income year (2) The person may choose to take the disposal of the asset into account in adjusting their taxable supplies for the relevant taxable period and income year, by subtracting the value, including GST, of the asset from— (a) the total taxable supplies for a taxable period for the purposes of the formula in section RC 11(1) , in proportion to the output tax which is attributed under section 20(4) of that Act to that taxable period for the supply of the asset: (b) the base amount of total taxable supplies for the corresponding income year under section RC 8(2) , in proportion to the output tax which is attributed under section 20(4) of that Act to a taxable period in that income year for the supply of the asset. Informing Commissioner (3) For the purposes of subsection (2), the person must inform the Commissioner of both the disposal of the asset and the value of its supply, and may do this either in writing or by telephone. Rounding percentages (4) In the determination of the value of the supply of the asset under subsection (1)(b)(i), the amount must be rounded to a whole percentage number. Defined in this Act: amount , base amount , business , Commissioner , GST , GST ratio , income year , pay , provisional tax , revenue account property , taxable activity , taxable period , taxable supply , total taxable supplies , Compare: 2004 No 35 s MB 18 Section RC 19(2): substituted, on 1 April 2008, by section 534 of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).