Facts on Tax

Entertainment

Entertainment expenditure is limited to 50% deduction if it falls within the following:

  1. Corporate Boxes
  2. Holiday Accomodation
  3. Pleasure Craft
  4. Food and Beverages at any of the above or in specific circumstances eg. Business Lunches


There are a number of exemptions from these rules, please talk to us if you are unsure.

Gift Duty

Value of Gift Duty Payable
0 to $27,000 NIL
$27,001 to $36,000 5% of value over $27,000
$36,001 to $54,000 $450 plus 10% of value over $36,000
$54,001 to $72,000 $2,250 plus 20% of value over $54,000
Over $72,000 $5,850 plus 25% of value over $72,000


Goods and Services Tax

GST Rates
  1. On supplies in NZ 12.5%
  2. Zero rated supplies (eg exports) 0%
Exemptions:
  1. Financial Services
  2. Domestic Rentals
  3. Wages/Salaries and most Directors Fees
  4. Registration threshold - $60,000 turnover P.A.
  5. Filing frequency threshold - Turnover exceeding $500000 P.A. 1 or 2 monthly
  6. Filing basis threshold - Turnover exceeding 2,000,000 P.A. must use invoice basis
PAYE on Salaries and Wages

if PAYE deductions exceed $500,000 P.A. deductions from 1st month to 15th month - due 20th of the same month and balance of monthly deductions are due 5th of the following month. For deductions of less than $500,000 P.A., PAYE is due 20th of the month follwing deduction.

Employee ACC Earner Premiums, Student Loan repayments and Child Support deductions payable follow the same rules.

Taxpayer Penalties

Reassessed tax may incur the following penalties:

Lack of Reasonable Care 20%
Unacceptable Tax Position 20%
Gross Carelessness 40%
Abusive Tax Position 100%
Evasion 150%


The above penalties may be reduced for disclosure before an audit by 75% or during an audit by 40%. Above penalties may be increased by 25% for obstruction.

Late Payment

If you don't pay your taxes or duties on time, you will face standard penalties for late payment.

  • All initial late payment penalties imposed on and after 1 April 2002 are staggered in two phases.
  • An initial 1% late payment penalty will be charged on the day after the due date.
  • A further 4% penalty will be charged if there is still an amount of unpaid tax (including penalties) at the end of the 7th day from the due date.
  • Every month the amount owing remains unpaid a further 1% incremental penalty will be added.
Late payment penalties may be remitted in limited circumstances. These penalties apply to all taxes and duties, but not to student loan or child support payments.

More information can be found on the IRD Website