NZ Taxation Advisory Blog

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

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These accounts can show either: Credit balances: When a shareholder has contributed more to the company than they have withdrawn. Debit balances: When a shareholder has withdrawn more from the company than they have contributed.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

Employer Obligations Employee vs. Contractor Payments Employees Employees are remunerated with salaries or wages. Employers must deduct the appropriate tax before making payments. Contractors Contractors, on the other hand, are paid using Schedular Payments, which may include a Goods and Services Tax (GST) component. These payments require different tax treatment compared to employee wages. Tax Deductions and Employer Responsibilities PAYE and Other Deductions Employers must deduct tax from employee salaries and wages. This includes: PAYE (Pay As You Earn) – Standard income tax deductions. Employer Superannuation Contribution Tax (ESCT) – Deducted from employer contributions to KiwiSaver. Student Loan Repayments – Deducted if the employee has an outstanding student loan. Child Support Payments – Deducted as per IRD requirements. ACC Earner Levies – Included in PAYE but not in Schedular Payments. Forms Required for Employees and Contractors Employers and contractors must complete specif...

Goods and Services Tax (GST) is a crucial aspect of business operations in New Zealand. Understanding GST registration, filing requirements, and compliance ensures smooth financial management and adherence to Inland Revenue Department (IRD) regulations. GST Registration To register for GST, a business must engage in an activity on a continuous and regular basis in exchange for consideration (payment). Charities providing goods or services may also charge GST. In most cases, a business's GST number is the same as its IRD number. Businesses with an annual turnover of less than $60,000 are not required to register but may choose to do so for benefits such as: Potential GST refunds in some cases. A more professional appearance by being inside the tax system. GST Basis Options Businesses can choose from three GST basis options: Payments Basis – GST is calculated based on actual cash payments and receipts. Invoice Basis – GST is calculated based on the earlier of invoice date or payment ...

Filing and paying taxes on time are essential for compliance with the Inland Revenue Department (IRD). Good record-keeping, budgeting, and planning play a significant role in managing your tax position effectively. Business Structures and Taxation Sole Trader A sole trader operates under their personal IRD number. The income tax and GST returns of the business are linked to the individual's tax number. However, in case of tax defaults, personal assets may be at risk. Sole traders file an IR3 tax return based on their business profit. Company A company has its own non-individual IRD number. This is used for filing employment information, imputation credits, and fringe benefits tax. A company can pay profits as shareholder salary, potentially allowing for tax optimization. Companies file an IR4 tax return. Partnerships A partnership also has a non-individual IRD number, but it does not pay income tax directly. Instead, profits and losses are distributed to partners, who report them i...