NZ Taxation Advisory Blog

When filing a company's income tax return in New Zealand, the Inland Revenue Department (IRD) requires information on the balance of the shareholders' current account. This is an essential aspect of ensuring tax compliance and accurately reporting financial activities. What Is a Shareholders' Current Account ? A shareholders' current account reflects the transactions between a company and its shareholders. These accounts can show either: Credit balances: When a shareholder has contributed more to the company than they have withdrawn. Debit balances: When a shareholder has withdrawn more from the company than they have contributed. Companies must ensure the accurate recording of contributions, withdrawals, and other shareholder-related transactions. The balance provides insight into whether shareholders owe money to the company or vice versa, and may have tax implications. Links Shareholders' Current Accounts Overview

Financial Reporting : Governed by the Financial Reporting Act 2013 The Financial Reporting Act 2013 establishes the External Reporting Board (XRB) as the authority responsible for financial reporting standards. Key aspects include: External Reporting Board (XRB): The XRB is tasked with issuing financial reporting standards and ensuring these standards align with global practices. Financial Reporting Strategy: The XRB develops a comprehensive financial reporting strategy to guide the preparation and presentation of financial statements. Tax Reporting : Governed by the Tax Administration Act For tax reporting purposes, the Tax Administration Act 1994 provides a different framework. Key features include: Order in Council: The IRD relies on Orders in Council to set specific tax reporting requirements. These are regulations issued by the Governor-General on the advice of the Executive Council. IRD Requirements: The IRD has separate guidelines for tax-related financial statements, focusing o...