Running a business across the Tasman comes with plenty of opportunities — and a fair share of responsibilities. If your Australian business operates in New Zealand, it’s essential to stay on top of your New Zealand tax obligations.
Inland Revenue (IR) has recently stepped up its approach to unpaid taxes, introducing new technology and stricter recovery practices that all business owners should be aware of.
Ignoring overdue taxes is no longer an option. Inland Revenue now has the tools and policies in place to identify and act quickly on outstanding debts — often before taxpayers realise how serious things have become.
What’s Changing in Inland Revenue’s Debt Recovery Approach
Inland Revenue has rolled out a new, more aggressive debt collection policy aimed at reducing unpaid tax across New Zealand. Using machine learning technology, the department can now analyse each taxpayer’s history, payment behaviour, and risk profile to determine the best strategy for recovering money owed.
This means faster, more personalised, and more persistent follow-ups. Typically, IR will start with a phone call and may follow up if there’s no response. However, if communication efforts are ignored, they will quickly escalate matters — including deducting funds directly from New Zealand bank accounts or initiating formal enforcement action.
The 20-Day Window to Act
If you receive a payment request from Inland Revenue, you now have just 20 days to respond or make full payment. Within that time, taxpayers can propose a payment arrangement or instalment plan, but only if they show a genuine intent to resolve their debt.
For repayment plans under six months, IR may accept a simple proposal. Anything longer will likely require detailed financial information and evidence of your ability to meet ongoing commitments.
What This Means for Australian Businesses in New Zealand
For Australian-owned businesses trading or operating in New Zealand, this change underscores the importance of active tax management. A small oversight or communication lapse could now lead to bank deductions or enforcement action.
If your business has New Zealand tax debts, don’t wait for IR to call. This new system removes much of the leniency taxpayers once relied on — it’s all about fast response and clear communication.
At NZ Tax Accountants, we specialise solely in New Zealand tax and work with Australian-based businesses to manage compliance, negotiate payment arrangements, and communicate directly with Inland Revenue. We can help you regain control and protect your New Zealand operations from escalating enforcement action.
Take Action Now
If you’ve received a call or letter from Inland Revenue — or you’re worried about a potential tax debt — reach out today. Our team of New Zealand tax experts based here in Australia can assist you in understanding your position and working with Inland Revenue before enforcement begins.
Contact NZ Tax Accountants today to discuss your situation and safeguard your New Zealand business interests.
The information in this article is indicative of NZ tax rules and changes and not intended to be complete for all intents or purposes and does not constitute advice. It is recommended that you obtain professional advice, suited to your particular circumstances, from us before acting on anything you read.