TAX • 7 MARCH 2023 • 3 MIN READ

The ultimate fact sheet on New Zealand tax returns

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The facts to know when filing a tax return in NZ

What about a company tax return?

Get to know the IRD

How can Beany help with business tax returns?

The facts to know when filing a tax return in NZ

Do you know all there is to know about filing a tax return in NZ? There are always misconceptions floating around, so we’ve put together a handy fact sheet to cut through the noise. Whether you're filing for the first time or a seasoned professional, you need to file your tax returns correctly, on time, and (ideally) with the best outcome possible. This list provides a quick rundown on the key definitions, deadlines, and aspects of filing a tax return in NZ, as well as pitfalls to be aware of. Knowledge is power, as they say, so read on to keep yourself informed.

You must file a tax return if you derived any form of business income, self-employment income, or contracting income. You also need to file a tax return if you have earned more than $200 of income that has not already been taxed in New Zealand- this includes overseas income and rental income (including your AirBnB and Book a Bach property).
If you’re an individual and your only source of income is New Zealand-earned salary or wage, interest, or dividends, you don’t need to file a tax return. The IRD will contact you directly if they owe you money (or if you owe them!)
The financial year (tax year) in New Zealand runs from 1 April to 31 March.
Taxable income and deductions must be reported in New Zealand dollars.
Late filing of tax returns may result in penalties and interest charges.
Income tax returns are used to calculate the amount of income tax owed for the tax year. Even if you're filing frequent Goods and Services Tax returns, you still must file an annual income tax return, as it is a separate tax.
Taxable income includes salary and wages, interest, dividends, business income, and rental income.
You can claim a tax credit for tax deducted before it was paid to you - for example, PAYE deductions made by your employer, Resident Withholding Tax (RWT), or Imputation Credits showing on dividend and interest certificates.
You can file your own tax return or work with an accountant.
Tax returns must be filed by the 7th of July for the previous tax year if you decide to file yourself, or by 31 March of the following year if you're working with an accountant and are eligible for an extension of time (EOT).
Tax returns can be amended if you find errors or omissions after they've been filed.
Individuals who earn between $24,000 and $48,000 per annum may be eligible for the Independent Earner Tax Credit, which is a refundable tax credit of up to $520.
Business expenses can be claimed in a tax return against business income as long as it helps generate taxable income. You’re not eligible to claim expenses that have ‘personal elements’. You also can’t claim expenses incurred in earning PAYE-taxed salary or wages.

What about a company tax return?

All companies must file a company tax return regardless of whether or not they were trading, or made a profit. If your company is not trading, you can apply to the IRD to register as a non-active company and you won’t need to file a company tax return until the company commences trading again.
Your tax liability needs to be paid on the 28th of February of the following year if you file your own tax return, or on the 7th of April of the year following if you have a tax agent.
If you are filing yourself, your tax return is due on the 7th of July, or the 31st of March of the following year if you have a tax agent.
Late filing of tax returns will result in a late filing penalty. If you are late to pay your taxes, you are liable to face both late payment penalties and use of money interest charges.
Company tax returns are used to calculate the amount of company tax owed for the tax year. The current NZ company tax rate is 28%. If your company generates a loss during the period the tax return calculates the taxable loss that can be carried forward and offset against future taxable profits, therefore reducing your tax liability in future periods.
Taxable income includes trading profit, interest income and investment income.
Tax credits are sometimes available, for example, if you carry out research & development and hit certain criteria relating to innovation and making advancements in science or technology then tax credits can be claimed.
You can file your own tax return or work with an accountant.
Tax returns should be amended if you find errors or omissions after they've been filed.
Business expenses can be claimed in a tax return against business income as long as they are incurred wholly and exclusively for the purposes of the trade.

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Get to know the IRD

The Inland Revenue Department is responsible for collecting tax from both individuals and businesses, as well as administering tax law passed down by the NZ government. They also manage benefits, tax credits, and other financial support for New Zealand citizens (such as student loans and child support). Understanding how the IRD works is vital to submit a tax return correctly, so here are some key points to keep in mind:

The IRD can audit tax returns to ensure compliance with tax laws.
The IRD can impose fines and penalties for non-compliance with tax laws.
The IRD provides tax tables and calculators to help calculate the amount of tax owed.
Employers are required to deduct Pay As You Earn (PAYE) tax from employees' salaries and wages and remit it to the IRD.
Businesses must keep records of their income and expenses (e.g., bank statement, receipts, invoices) for at least 7 years as per IRD’s requirements.
The IRD can negotiate payment plans for taxpayers unable to pay their tax debt in full.
The IRD can issue tax assessments if it finds errors or omissions in tax returns.
Tax refunds can be claimed by filing a tax return or by contacting the IRD.
The IRD offers a range of online tools and resources, including tax calculators, tax guides, and tax information bulletins.
There are tax pooling businesses (called intermediaries) that offer tax pooling services to help businesses manage their tax cash flow.
The Inland Revenue can offset tax refunds against outstanding tax debts.
Tax returns can be filed using a paper form or online using the myIR portal.
The Inland Revenue refunds overpaid tax, including PAYE and GST.
Employers must keep records of employees' salaries and wages, PAYE tax deducted, and KiwiSaver contributions for 7 years.
Professional help from a registered tax agent or accountant can minimise the risk of errors and penalties and help ensure compliance with tax laws.

How can Beany help with business tax returns?

We understand accounting and tax can be overwhelming - and we are here to take the weight off your shoulders. Beany's certified accountants and friendly team can help you manage your tax return. We carefully interpret and apply accounting and tax legislation to enable you to pay the least amount of tax legally possible.

Our expertise comes without the jargon and is designed to help you save both time and money. To find out more about how we can help, get in touch today.