STARTING IN BUSINESS- BASIC TAX OBLIGATIONS
| All taxpayers have to have an IRD Number. |
| If you are a sole
trader you use your personal IRD Number for your business, including GST if
you register for GST. |
| If you are in business as a company or partnership you will need a new IRD Number. That number will be used for GST as well. |
| You may have to complete various tax returns each year. These could include income tax, goods and service tax (GST), fringe benefit tax (FBT) and ACC Residual Claims. |
| If you intend to employ people you must register with the Inland Revenue Department. They will send you PAYE Deduction Tables and you should deduct PAYE plus Child Support, Student Loan Deductions and Taxes owing to IRD by the employee if directed by IRD. You will be required to pay these deductions to the IRD by the 20th day of the month after deduction. The IRD will send to you the monthly schedules on which to include information for these deduction payments by due date. |
| ACC Levies are payable by employers (based on wages paid to employees), companies (based on shareholders salaries paid), and by self employed persons (based on profits). |
| If you expect your turnover to be more than $40,000 you must register for goods and service tax with the IRD. |
| If you are in business and do not derive salary and wages income you have to pay your student loan repayments for this income directly to IRD, as no repayment deductions are made from this income as you earn it. |
| Business and some organizations have to prepare Financial Statements to work out their profits, so that they can calculate how much income tax to pay. |
| If your residual income tax (the tax to pay after subtracting any rebates you’re liable for plus any non-provisional tax paid during the year) is $2,500 or more you will have to pay provisional tax for the following year. This is not a separate tax but a way of paying your income tax as the income is received during the year. With provisional tax you pay instalments of income tax throughout the year, based on what you expect your tax bill to be. |
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