ACC Premiums
Depreciation Allowances
Donations
Entertainment
Fringe Benefit Tax
Gift Duty
Goods & Services Tax
Provisional Tax
Return Due Dates and Extensions of Time
Taxpayer Penalties

The Accident Compensation Corporation (ACC) has responsibility for insuring and collecting ACC premiums for employers, the self-employed and private domestic workers.

ACC premiums are calculated at a rate based upon the risk of accident for an industry category.

Economic rates apply to the purchase of assets. An additional 25% loading applies to new assets (excluding buildings). There is an option to use either straight line or diminishing value for all assets. The following assets are examples only.

Low value assets ($200 or less excluding GST) can be written off.

For individuals, a rebate of 1/3 of qualifying donations and voluntary school fees up to a maximum of $1,890 pa may be claimed in any income year.

Donation rebates for individuals (minimum $5) are now made on form IR526.

Companies (other than closely held companies) are entitled to a deduction for donations made in an income year up to either 1% of the companies net income or $4000. There are maximum limits available, please talk to us.

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

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

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

• FBT Rate 64% (or 49% for certain employees) of FBT value (income tax deductible)
• Return Period Quarterly or Annually

FBT Value of Motor Vehicles:
6% per quarter of original cost of vehicle (inc GST)

Low or Interest Free Loans:
Benchmark Interest Rate (from 1 July 2003)
7.33%p.a (reviewable quarterly)
For the most recent rates, check the IRD web site

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

Registration threshold - $40,000 turnover pa

Filing frequency threshold - Turnover exceeding $250,000 pa: 1 or 2 monthly

Filing basis threshold - Turnover exceeding $1,300,000 pa. must use invoice basis

Provisional Tax is payable in 3 instalments unless a taxpayer qualifies as a new provisional taxpayer. Provisional tax is calculated at 105% of the previous years residual income tax (RIT).

For non-individuals, use of money interest is payable on shortfall of terminal tax from the 1st instalment date until the terminal tax is paid.

For individuals, use of money interest is payable from the 1st instalment date where their RIT exceeds $35,000 or the taxpayer has estimated their provisional tax.

Standard balance date taxpayers 'linked' to a tax agent have until the 31 March the following year to furnish their income tax returns under the extension of time arrangements.

Taxpayers with balance dates from 1 April to 30 September must file their return by the due date for the preceding 31 March year.

Taxpayers with balance dates from 1 October to 31 March must file their returns by the due date for the following 31 March year.

Taxpayers failing to file returns by the due date may lose their extension of time resulting in earlier return and terminal tax payment dates for subsequent income years.

Reassessed tax may incur the following penalties:

If these penalties are imposed you should be aware that:

• these penalties do not apply until you pass a de minimus threshold of $20,000 shortfall in that return and on that position
• you should claim 50% off for previous good behaviour
• you should claim 75% off for voluntary disclosure/temporary shortfall. In this case voluntary disclosure includes alerting Inland Revenue at the time that you file the return that contains the position
  

The term 'de minimus" is a shorthand way of referring to a threshold that must be passed before the penalties apply.

The $20,000 de-minimus only relates to the unacceptable tax position shortfall penalty and abusive tax position shortfall penalty and not to the others. The other penalties for lack of reasonable care, gross carelessness and for evasion can apply from the first dollar shortfall of tax.

In the case of shortfall penalties for taking an unacceptable tax position or taking an abusive tax position, the $20,000 de-minimus relates to the actual tax shortfall as a result from taking that tax position. If your tax shortfall is under $20,000 you cannot be liable for the shortfall penalty for taking that position. This relates to each tax position taken e.g. submitting an income tax return, GST return etc, and is not cumulative.

The reductions for previous good behaviour, for making a voluntary disclosure and for the shortfall being only temporary will generally apply to all these penalties but you must refer to the legislation in each case.

Again, if Inland Revenue is seeking to apply a shortfall penalty to you, you need to refer to the legislation and commentaries.

• Late Payment
  
  1. If you don't pay your taxes or duties on time, you will face standard penalties for late payment.
  2. All initial late payment penalties imposed on and after 1 April 2002 are staggered in two phases.
  3. An initial 1% late payment penalty will be charged on the day after the due date.
  4. 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.
  5. Every month the amount owing remains unpaid a further 1% incremental penalty will be added.
  6. Initial late payment penalties imposed prior to 1 April 2002 were applied on the day after the due date at the rate of 5%.
  7. 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 at the IRD Web site
 

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