NZ Taxation Advisory Blog

Taxpayers in New Zealand, whether individuals, companies, partnerships, or trusts, under financial difficulties can make use of reliefs to ease the burden of tax. Tax Administration Act 1994 , Part 11: Remission, Relief, and Refunds, offers several provisions to support taxpayers who may find themselves in difficult financial situations. Relief refers to the assistance Inland Revenue can offer to help taxpayers manage or reduce tax debt. This may include: Entering into instalment arrangements. Writing off tax debt under specific grounds. Remitting (Writing off)  penalties or interest. Financial relief is a specific type of relief available when a taxpayer is experiencing serious financial hardship. It may involve: Setting up an instalment arrangement to pay the debt over time. Writing off amounts owing where repayment would place the taxpayer in serious hardship. Relief may be granted in response to various situations, such as errors, natural disasters, making it a broader category...

The provisional tax due dates are established in the Income Tax Act 2007, specifically in:  Section RC 9(2) and (3). These sections reference Schedule 3, Part A, Columns B, D, and F, which for the month of March as the month of balance date, correspond to the following calendar dates: 28 August, 15 January, 7 May . It’s not uncommon for a tax agent to finalize a client’s tax return as late as 31 March of the following year, especially under extension of time (EOT ) arrangements. This means that by the time the taxpayer's final tax position is determined, the first or even second provisional tax payment may be past. If the latest available assessment is not from the immediate preceding year, IRD allows tax to be calculated based on the tax year before the preceding year, uplifted by 10% . Links Income Tax Act 2007 – Section RC 9 Income Tax Act 2007 – Schedule 3 IRD – Payment Dates for Provisional Tax IRD – Standard Option for Provisional Tax

For  taxpayers with a 31 March financial year-end , the Tax Administration Act 1994 requires that annual income tax returns be furnished no later than 7 July of the following income year .  This is a statutory deadline that applies unless Inland Revenue (IRD) grants an extension. Tax agents may have until 31 March of the following year to file returns for their clients. Links Standard Practice Statement SPS 24/02 – Extension of Time Arrangements I RD Website – Extension of Time Arrangements for Intermediaries TAA 1994 Section 37 - Dates by which annual returns to be furnished TAA 1994 124C - Tax Agents

Paying a large lump sum of income tax at the end of the financial year can be challenging. Provisional tax helps to spread out tax payments throughout the year instead. Provisional tax is a method of paying income tax in instalments during the year, based on an expected income. If the provisional tax paid exceeds the actual income tax liability, a tax refund is issued after the annual income tax assessment is completed. As of 2015, the threshold for provisional tax is $5,000 of residual income tax (RIT). If RIT is below this threshold, provisional tax does not need to be paid. To calculate provisional tax, an estimate of income for the upcoming year must be made. This process involves a degree of judgment and forecasting. There are four available methods (as of 2025) for calculating provisional tax, depending on the nature of income and business operations: 1. Accounting Income Method (AIM) Requires the use of AIM-capable accounting software such as Xero or MYOB. The software submits...