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Source: Ministry of Business, Innovation and Employment (NZ) www.business.govt.nz

Do you have overseas accounts and investments?

If you have an account with an offshore financial institution, including banks and accounts maintained with certain offshore trusts, upcoming changes will see information about your overseas investments being shared with the IRD.

What you need to know

New Zealand is one of 105 countries and territories that has committed to sharing financial account information to combat global tax evasion. These laws have been in place since 1 July 2017.

From August 2018, the government will receive information about New Zealand tax residents with offshore financial accounts from other countries' financial institutions.

If you have an account with an overseas financial institution (including certain offshore trusts) you'll be required to confirm and disclose your tax residence status and tax identification number (TIN) with the overseas financial institution. This financial account information will be exchanged and will help the IRD verify that everyone is paying the correct tax on these overseas investments.

Read more…

Demystifying Income Tax

income taxTax is often a headache for business owners. As much as they want to avoid it, they can't because tax is part of their financial responsibilities. Many people find it daunting but once you understand some of the basic tax facts, you will be more prepared to deal with it.

As a dedicated tax accountant in Auckland, we are sharing this tax overview so you can better understand your tax obligations - which will also help you more effectively manage your business finances.

Income Tax

Income tax is payable on the net taxable income of the business. Broadly speaking it is computed based on the difference between your business income and your business expenses. However, there are some expenses that you need to adjust when calculating your taxable income - like entertainment expenditure. Talk to your accountant about these special rules.  Read more…

Tax Tips for 2017

Tax Tips for 2017For most business owners, tax is not at the top of the list of what they want to focus on when the new year hits. But managing taxation is a business requirement you cannot ignore, especially now that the Inland Revenue Department (IRD) is making technological changes to modernise tax administration.

As a trusted tax accountant in Auckland, we are sharing these top tax tips that will help keep you informed, as well as helping you to meet your tax obligations in 2017.

1. Proposed PAYE system changes being considered

The IRD proposes to further integrate the PAYE (Pay As You Earn) system into day-to-day business operations. This is to improve the accuracy of employee deductions and reduce the compliance effort for employers. Read more…

Tax deductions on entertainment and giftsAre you holding a Christmas function or a year end party this year?

Giving gifts to your employees?

If you are, you may be able to claim a tax deduction.

Below is a quick guide to tax on Christmas entertainment and gifts for your business.

1. Entertainment

There are rules and conditions when it comes to tax deductions with Christmas parties, year-end functions and other client/customer or employee entertainment expenses. Some entertainment expenses are fully deductible, while some are not. Here are some quick tips to help you: Read more…

Provisional Tax and GST Reminders


The holiday season is nearly here! As well as preparing for Christmas, you also need to remember that a range of

tax payments are due on 15 January 2016. Please review the schedule below to check your tax obligations:

Note: these dates apply to those clients for whom we prepare tax returns. Different dates will apply for those clients for whom we don't prepare returns. Please ask us if you'd like more information.

 TAX TYPE WHO/ WHAT  WHEN IT'S DUE 
 PAYE  large employers return and payment  7 December (due to 5th falling on a weekend)
     15 January
     5 February
     
   large and small employers return and payment  21 December (due to 20th falling on a weekend)
     20 January
     22 February (due to 20th falling on a weekend)
     
 GST  return and payment for the period ended 30 November  15 January
   … for the period ended 31 December  28 January
   … for the period ended 31 January  29 February (due to 28th falling on a weekend)
     
 FBT  for employers with a November balance date under close company option - annual return and payment  7 December
   for employers with a December balance date - annual return and payment  15 January
   quarterly return and payment (if completed quarterly)  20 January

Provisional and Terminal Tax

I pay provisional tax…   And my balance date is… So my provisional tax is due next… 
 2 monthly (6 times a year)  September, July, May, March, January or November  15 January AND 29 February
(due to 28th falling on a weekend)
   October, August, June, April, February or December  28 January
     
 4 monthly (3 times a year)  July, March or November  15 January
   August, April or December  28 January
   September, May or January  29 February (due to 28th falling on a weekend)
     
 6 monthly (twice a year)  May or November  15 January
   June or December  28 January
   July or January  29 February (due to 28th falling on a weekend)
     
 Terminal tax  December  Terminal tax payment due 15 January
   January  Terminal tax payment due 9 February
(due to 7th falling on a weekend and
Waitangi Day 'Mondayised' to the 8th)
     

Other basic things to remember in relation to income tax/ provisional tax and GST payments:

  1. Filing your tax return. Income tax returns are due on 7 July every year, unless you have an extension of time. You need to file an individual income tax return (IR3) if you are a sole trader, or, if you own a company, your company needs to file a company income tax return (IR4) including a copy of your business's financial records (IR10).
  2. Claiming expenses. You can sometimes reduce your tax bill by claiming business expenses. You need to have good records and receipts as supporting documents. If you are using your home for business, you may be able to claim part of your household expenses like telephone bills, electricity bills and mortgage interest.
  3. Residual income tax. If you owe less than $2500 of income tax to IRD you just need to pay it at the end of the tax year. But if your last residual income tax payable was more than $2500, you have to pay provisional tax for the following year. 
  4. Provisional tax calculation. There are three ways to calculate the amount of provisional tax you should pay, the standard, estimation and ratio option. If you are not registered for GST, you can't use the ratio option. 
  5. Due dates for provisional tax and GST payments. The payment schedule and number of times you need to pay depends on the method you use to calculate your provisional tax. Please visit IRD Provisional tax basic information to check the due dates for your provisional tax.

Make sure to file and pay your tax on time to avoid penalties and use of money interest. If you have concerns about paying your tax in full or on time, please don't hesitate to ask assistance from our tax advisors to see what options might be available for you. You could also use a tax pooling service like Tax Management New Zealand. You can reduce your IRD interest costs by up to 30 percent and eliminate late payment penalties if you purchase your tax shortfall from Tax Management New Zealand. 

Please call us on (09) 576 4166 or request an appointment online if you need help managing your upcoming tax obligations.

January provisional tax and GST payments


The next provisional tax instalment and GST are both due 15 January 2014. At this time of the year clients often tell us they have a cashflow problem and find it difficult to meet both payments. Through our association with Tax Management New Zealand it is possible for you to purchase your provisional tax for 15 January and defer payment until you have sufficient cashflow. Whilst Tax Management New Zealand charges a small fee, it can be significantly less than the penalties and interest charged by the IRD if you don't make the payment at all. If you are in this situation please give us a call on (09) 576 4166 as there are ways we can help.

Timely tax reminders

While we are all busy in the lead up to Christmas, don't forget these important tax dates in the New Year:

7 Jan

Terminal Tax

Taxpayers (where we prepare tax returns) on a December balance date

FBT

Close companies paying FBT on an income year basis (where we prepare tax returns) with a December balance date

15 Jan

Provisional tax

Standard provisional taxpayers on March, November and July balance dates

GST ratio method taxpayers on January, March, May, July, September, and November balance dates

6 monthly GST taxpayers on May and November balance dates

GST return and payment for period ended 30 November

Taxpayers filing GST on a monthly basis AND taxpayers (with March, May, July, September, November and January balance dates) filing on a 2 monthly basis

20 Jan

FBT

Third quarter return (for the three month period ended December)

28 Jan

Provisional tax

GST ratio method taxpayers on February, April, June, August, October, and December balance dates

6 monthly GST taxpayers on June and December balance dates

GST return and payment for period ended 31 December

Taxpayers filing GST on a monthly basis AND taxpayers (with February, April, June, August, October and December balance dates) filing on a two monthly basis

9 Feb
(7th falls on a weekend)

Terminal Tax

Taxpayers (where we prepare tax returns) with a January balance date

FBT

Close companies paying FBT on an income year basis (where we prepare tax returns) with a January balance date.

Terminal Student Loan Repayment

For those (where we prepare tax returns) with a January balance date

Note: these dates apply to those clients for whom we prepare tax returns. Different dates will apply for those clients for whom we don't prepare returns.

If you have any questions about these dates, please contact us for assistance.

A reminder, you are no longer able to use investment losses such as from rental properties to reduce your income for working for families (WFF) tax credit.

The definition of income now also includes an extra nine types of income:

  1. Attributable trustee income
  2. Attributable fringe benefits
  3. PIE income other than registered superannuation schemes such as Kiwisaver and retirement benefit schemes
  4. Passive income earned by children (includes interest, dividends and rent). Amounts over $500 per child will be included as family income
  5. Worldwide income received by a non-resident spouse
  6. Tax exempt salary or wages under specific international agreements
  7. Income equalisation deposits made by you, your trust or a company controlled by you or your trust
  8. Certain pension and annuities - includes 50% of payments from life insurance policies or a superannuation fund (excludes NZ super)
  9. Other payments received from any sources that are used for your family's day-to-day living expenses (but only if the total amount from those sources is more than $5,000). An example of this might be board received.

In future, when you apply for WFF tax credits, you'll need to let IRD know about amounts from any of the above sources.

For those clients who receive or are entitled to WFF credits, when we prepare your tax return we'll need to request the above information.

Changes to online tax returns


The IRD have made changes to the way you file your GST returns.

In September last year the IRD introduced the eGST filing service. Now the decision has been made to remove the ability for the public to access the standard online form, meaning customers will need to change their filing methods and register to file their returns through MyIR.

The IRD will have sent a letter to all clients in July notifying them of the change. In addition to this a new GST email service has been established to alert customers registered with My IR that their GST return is available, three days before it's due.

If you are having difficulty with this change please call us on (09) 576 4166 as we are able to assist with preparing and filing your GST.


A recent change in legislation introduced new rules on the tax treatment of lease inducement payments and surrender payments. From 1 April 2013, such payments are deductible for the payer and taxable for the recipient and are subject to spreading rules.

If you are negotiating or renewing commercial leases, we recommend talking to us to ensure any tax considerations are correctly taken into account.

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