Check Out The Latest NZ Tax Updates
We include updates and reminders about NZ tax changes for those carrying on a business in New Zealand and for individuals who still have tax ties there.
New Zealand provisional taxpayers can hardly wait to shelve their crystal balls and balancing acts from the new tax year starting 1 April 2018.
That being said, Inland Revenue are introducing a new method of meeting your provisional tax obligations. The idea behind it is to calculate and match a New Zealand taxpayers income tax payments with their profitability.
In order to attract highly skilled people to New Zealand, an automatic temporary tax exemption was granted from 1 April 2006 to individuals who qualified as transitional residents to reduce tax barriers.
Who qualifies as transitional resident?
If you run your New Zealand business from Australia, you might prefer to store your records here in Australia. But NZ tax law requires all taxpayers to keep their business records in New Zealand.
The good news is there are some situations where Inland Revenue may authorise you to keep your New Zealand tax records in Australia.
Small Businesses Account for Income Tax on an Accrual, Not a Cash Basis in New Zealand. But there Are Exceptions
If you’re running a small business in New Zealand you need to account for income tax on an accrual/invoice basis – but there are some exceptions.
Although Australia has a useful option for small businesses allowing them to account for income tax on a cash basis, this option is rarely open to Australian businesses to do the same in New Zealand.
Inland Revenue has announced some quite significant changes that may have an impact on Australians doing business in New Zealand from the start of the 2018 tax year.
We are sometimes contacted by clients who advise that in finalising their Australian financial statements and income tax returns they have come across a transaction that should have been included in the financial statements and income tax return of the New Zealand entity.
The question often arises, “do we need to file an amended income tax return”?
Shareholder employees can now be on a PAYE salary and then top up at the end of the year with a lump sum on which they can pay provisional tax.
Previously, in New Zealand shareholder employees were only allowed to be either a PAYE salary earner or a shareholder’s salary earner. They couldn’t be both.
There is a mandatory “shortfall” penalties regime in place in New Zealand which Inland Revenue apply automatically and for a large number of cases.
Inland Revenue can charge penalties in the range from 20% up to a whopping 150%. These penalties cannot be remitted and are good reason in themselves to encourage you to engage a knowledgeable tax advisor.
Most New Zealand businesses will have a year-end of 31st March. It is possible in some situations to have that balance date changed to 30th June and that may suit some Australian businesses who have New Zealand interests. If you believe that a 30th June balance date would suit your needs better, simply contact us and we can prepare an application on your behalf.
The Accident Compensation Corporation (ACC), is the organisation responsible for both overseeing New Zealand workplace safety and compensating anyone injured in the workplace.
It is funded by levies paid by New Zealand and Australian businesses who are registered as NZ employers. And from 1 April 2017 the good news for business is that these levies will fall.
Unlike the Australian system where you can report on, and pay for, several taxes on one tax return, New Zealand treats every tax as it’s own little beast with little interaction between them. A different tax return due at a different time with a different payment date for each type of tax. And that causes a lot of confusion for Australians doing business over there.
It is a legal requirement that you enter into an employment agreement with your staff. And now there is a free online tool designed to help you comply with the law.
New Zealand hasn’t had a unionised workforce for a number of decades so it has been difficult to produce agreements by sneakily using union agreements as a template.