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IRD have received a question regarding the GST treatment of a director or board member who provides their services through a personal services company. Specifically, if a director provides their services through a personal services company (PSC) will the PSC be able to register for GST when the director would not be able to register if they were providing their services in their capacity as a natural person?


IRD states that if the PSC contracts with the company requiring a director and supplies the services of the director under that contract, those supplies of directorship services are not excluded from the definition of “taxable activity”. This is because the supply by a PSC of a person to provide directorship services is distinct from the supply of those directorship services by an individual. As long as the PSC’s level of activity is sufficient to be a taxable activity (as defined in section 6(1)) the PSC can register for GST.

The following example has been provided by IRD:

Rupert Barre is an independent director of Nutwood Forest Limited (NFL), a position that was entered into through his PSC, Rupert Barre Limited (RBL). Rupert Barre is a well-respected public figure and proves to be an excellent director. Subsequently, RBL receives numerous requests for Rupert to join the boards of other companies. RBL enters into contracts with several other companies to provide Rupert Barre as a director. NFL and the other companies agree to pay RBL for the provision of directorship services on the issue of an invoice by RBL. Rupert now sits on the board of several companies, and those companies have board meetings at least every two months. RBL has been regularly entering into contracts with companies, invoicing for Rupert’s services, dealing with inquiries from other companies interested in appointing Rupert as a director, paying Rupert a monthly salary, and dealing with all tax and other regulatory matters. RBL’s activity would be sufficient to amount to a taxable activity, so RBL can register for GST (and if RBL’s level of supplies is over $60,000 per annum it must register for GST). Section 6(3)(b) does not exclude RBL’s activity from being a taxable activity; it applies to exclude only the activity of Rupert Barre himself from the definition of “taxable activity”.

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New Zealand Tax Accountant.