Tax Facts

ACC issues an invoice to all employers each July based on what employees have earned for the year ended 31 March.

Depreciation is a non cash expense that gets deducted from your business’s income annually and is designed to account for any wear and tear on the business’s fixed assets.

Entertainment expenditure is limited to a 50% deduction if it falls within certain categories.

Perks of the job, such as the use of a company car or a cell phone, are subject to Fringe Benefit Tax (FBT). This includes benefits provided through someone other than an employer.

As of 1 October 2011 there is no gift duty on dispositions of property. However, gifts made before the new rules came into effect are still subject to duty and are required to be accounted for.

GST in New Zealand is calculated at 15%. It is tax on goods and services supplied by a GST registered entity on any taxable activity they undertake.

The sale of goods and services over the internet is subject to scrutiny and care must be taken to ensure you fulfil your taxation obligations.

Kiwisaver is an initiative that has been incorporated by the New Zealand Government to help all New Zealand residents, and people with the right to live here on a permanent basis, to save towards their retirement.

PAYE (pay as you earn) is a tax deducted from your employee’s salaries or wages and paid to the Inland Revenue Department (IRD) each month on their behalf.

Provisional tax is a way of paying your annual income tax in three instalments throughout the year as your income is received.

If you have earned interest from investments or through bank accounts, this interest is taxed by way of RWT.

If you are a New Zealand tax resident and your annual income is between $24,000 and $48,000 you may be eligible for the independent earner tax credit.

There are a number of reasons you may be charged a penalty from the Inland Revenue Department, such as short paying your tax or not making the required payments by the allocated due dates.