The usual financial year for companies in New Zealand runs from 1 April to 31 March. It’s possible to adopt an accounting year which doesn’t correspond to the financial year, but permission is required from the Commissioner of the IRD. Businesses must prepare and file an income tax return with the IRD and are required to make interim provisional tax payments. The number of instalments you’re required to make depends on the way you choose to calculate your provisional tax instalments.
If you’re GST-registered, how often you file GST returns also determines how many provisional tax instalments you’re required to make. The amount of provisional tax you need to pay is based on your expected profit for the year or your GST taxable supplies (sales) and depends on the way you choose to calculate your provisional tax instalments. At the end of the year you pay or are refunded the difference between the amount of provisional tax you’ve paid and the amount you should have paid, based on your actual profit for the year.
A sole trader is taxed at the same rates as individuals, while resident companies pay income tax at a rate of 33 percent on their worldwide taxable income. Employers are also required to make contributions to the Accident Compensation Corporation (ACC) scheme and may also be required to pay Fringe Benefit Tax.
If the turnover (or expected turnover) of your business exceeds NZ$60,000, you must register for GST. Note that this figure refers to turnover and not to profit. If your business is registered for GST, you must levy GST (at 12.5 percent) on your goods and services, although you can reclaim GST paid on anything you buy for your business and certain other expenses.
Registration for GST is made at your local IRD office and once registered you must file a GST return monthly, two-monthly or six-monthly, depending on various factors. There are substantial penalties for not registering for GST or for filing late returns.
If you’re planning to move to New Zealand with the intention of becoming self-employed, buying an existing business or starting a business and you want to bring specialist tools, equipment, machinery or stock with you, you must prepare an inventory and obtain permission from the Collector of Customs. You may be permitted to bring some tools and business equipment with you free of customs duty; otherwise, you must pay GST at 12.5 percent and customs duty on their value. Note that you can bring any household items (which can include those with a combined work and household use) to New Zealand free of GST and duty when you first settle there.
For further information contact the Collector of Customs Offices:
or apply to one of the following offices:
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