Here is a quick reference to facts on tax:
Individuals: 2011-12 Year
| Taxable Income |
Tax Rate |
| 0 to $14,000 |
10.50% |
| $14,001 to $48,000 |
17.50% |
| $48,001 to $70,000 |
30.00% |
| $70,001 upwards |
33.00% |
Individuals: 2010-11 Year
(Full composite rates for the year)
| Taxable Income |
Tax Rate |
| 0 to $14,000 |
11.50% |
| $14,001 to $48,000 |
19.25% |
| $48,001 to $70,000 |
31.50% |
| $70,001 upwards |
35.50% |
Individuals: 2010-11 Year
(Current tax rates effective to 30 September 2010)
| Taxable Income |
Tax Rate |
| 0 to $14,000 |
12.50% |
| $14,001 to $48,000 |
21% |
| $48,001 to $70,000 |
33% |
| $70,001 upwards |
38% |
Individuals: 2010-11 Year
(New tax rates effective from 1 October 2010)
| Taxable Income |
Tax Rate |
| 0 to $14,000 |
10.50% |
| $14,001 to $48,000 |
17.50% |
| $48,001 to $70,000 |
30% |
| $70,001 upwards |
33% |
Individuals: 2008-09 Year
| Taxable Income |
Tax Rate |
| 0 to $9,500 |
13.75% |
| $9,501 to $14,000 |
16.75% |
| $14,001 to $38,000 |
21% |
| $38,001 to $40,000 |
27% |
| $40,001 to $60,000 |
33% |
| $60,001 to $70,000 |
36% |
| $70,001 upwards |
39% |
Individuals: 2009-10 Year
| Taxable Income |
Tax Rate |
| 0 to $14,000 |
12.50% |
| $14,001 to $48,000 |
21% |
| $48,001 to $70,000 |
33% |
| $70,001 upwards |
38% |
Taxable Income: Companies 2011-12 Year: 28%
Taxable Income: Companies 2010-11 Year: 30%
Taxable Income: Companies 2008-09 and 2009-10 Years: 30%
Taxable Income: Trustees 2011-12 Year: 33%
Taxable Income: Trustees 2010-11 Year: 33%
Taxable Income: Trustees 2008-09 and 2009-10 Years: 33%
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 20% 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.
| |
Economic Rate (DV)
|
20% Loading
|
| Building (acquired before 19/05/05) |
4% |
N/A |
| Building (acquired after 19/05/05) |
3% |
N/A |
| Computer (acquired before 01/04/05) |
40% |
48% |
| Computer (acquired after 01/04/05) |
50% |
60% |
| Office Furniture |
12% |
14.4% |
| Vehicle |
26% |
31.2% |
Low value assets ($500 or less excluding GST) can be written off. ($200 or less excluding GST before 19/05/05)
If you made financial donations to a charity, or paid for childcare or a housekeeper (in certain situations) during the last tax year, you can claim part of it back as a rebate. Donation rebates for individuals (minimum $5) are made on form IR526. The limits on donations claimable for individuals, companies and Maori Authorities have been removed as of the 2008/2009 tax year.
Entertainment expenditure is limited to a 50% deduction if it falls within the following:
- Corporate Boxes
- Holiday Accommodation
- Pleasure Craft
- 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.
For 1 April 2011 to 31 March 2012: The calculations shown below are based on the eldest child being under 16 and all other children being under 13 years of age. For more information on Working for Families Tax Credits (previously called family assistance) please visit www.ird.govt.nz/wff-tax-credits.
Families Tax Credits and In-Work Payment
Family Tax Credits are paid regardless of your source of income. In-work tax credits are for families who normally work a minimum number of hours each week.
|
Family Income (before Tax)
|
Number of Children
|
FTC (Family Tax Credits)
|
IWTC (In-Work Tax Credits)
|
|
38,000
|
1
|
4316
|
3120
|
|
|
2
|
7488
|
3120
|
|
|
3
|
10660
|
3120
|
|
|
4
|
13884
|
3900
|
|
|
5
|
17056
|
4680
|
|
|
6
|
20228
|
5460
|
|
45,500
|
1
|
2808
|
3120
|
|
|
2
|
5980
|
3120
|
|
|
3
|
9204
|
3120
|
|
|
4
|
12376
|
3900
|
|
|
5
|
15548
|
4680
|
|
|
6
|
18720
|
5460
|
|
59,000
|
1
|
104
|
3120
|
|
|
2
|
3276
|
3120
|
|
|
3
|
6500
|
3120
|
|
|
4
|
9672
|
3900
|
|
|
5
|
12844
|
4680
|
|
|
6
|
16016
|
5460
|
|
74,000
|
1
|
0
|
260
|
|
|
2
|
312
|
3120
|
|
|
3
|
3484
|
3120
|
|
|
4
|
6656
|
3900
|
|
|
5
|
9828
|
4680
|
|
|
6
|
13052
|
5460
|
|
89,000
|
1
|
0
|
0
|
|
|
2
|
0
|
416
|
|
|
3
|
468
|
3120
|
|
|
4
|
3640
|
3900
|
|
|
5
|
6864
|
4680
|
|
|
6
|
10036
|
5460
|
|
105,500
|
1
|
0
|
0
|
|
|
2
|
0
|
0
|
|
|
3
|
0
|
312
|
|
|
4
|
364
|
3900
|
|
|
5
|
3536
|
4680
|
|
|
6
|
6708
|
5460
|
|
120,500
|
1
|
0
|
0
|
|
|
2
|
0
|
0
|
|
|
3
|
0
|
0
|
|
|
4
|
0
|
1248
|
|
|
5
|
520
|
4680
|
|
|
6
|
3744
|
5460
|
|
120,501
|
1
|
0
|
0
|
|
|
2
|
0
|
0
|
|
|
3
|
0
|
0
|
|
|
4
|
0
|
0
|
|
|
5
|
0
|
0
|
|
|
6
|
0
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Minimum Family Tax Credit
If your family income (before tax) is below $25,726 a year before tax you may also be entitled to a family tax credit.
Parental Tax Credit
You can receive up to $1200 (in total) for each newborn child, depending on your family income. The amount will depend on:
- Family Income (before tax)
- The number of days your baby was in your care (as the principal child carer) during the first eight weeks. If your baby is in a neonatal unit, it is still in your care.
Basic FBT Rates
- 2009-2010 FBT Rate 49% (or 61% for certain employees) of FBT value (income tax deductible)
- 2010-2011 FBT Rate 45.99% (or 55.04% for certain employees) of FBT value (income tax deductible)
- 2011-2012 FBT Rate 42.86% (or 49.25% for certain employees) of FBT value (income tax deductible)
- Return Period Quarterly or Annually
FBT Value of Motor Vehicles:
When calculating the taxable value for motor vehicles, you will need to use either the actual cost price, or the tax book value. From 1 April 2006 the FBT value of the benefit when using cost price reduced from 24% to 20% (or from 6% to 5% if FBT is paid quarterly).
Low or Interest Free Loans:
As from 1 October 2011 Gift Duty has been abolished. This may provide further reasons to establish a trust.
You still need to think carefully about whether or not to gift to your trust. Some issues to consider are:
-Would the gift result in creating an insolvent disposition?
-Should you leave some debt owing by the trust in order to receive repayments easier?
-Are the trust Acknowledgments of Debt up to date and in line with the Financial Statements?
Up until 1 October 2011 the Gift Duty rates were as follows:
| 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 |
GST Rates
- On supplies in NZ 15.0% from 1/10/10 (12.5% prior to 1 October 2010)
- Zero rated supplies (eg exports) 0%
Exemptions:
- Financial Services
- Domestic Rentals
- Wages/Salaries and most Directors Fees
Registration threshold - $60,000 turnover pa
Filing frequency threshold - Turnover exceeding $500,000 pa: 1 or 2 monthly
Filing basis threshold - Turnover exceeding $2,000,000 pa. must use invoice basis
If PAYE deductions exceed $500,000 pa, deductions from 1st to 15th month- due 20th of the same month and balance of monthly deductions are due the 5th of the following month. For deductions of less than $500,000 pa, PAYE is due 20th of the month following deduction. Employee ACC Earner Premiums, Student Loan repayments and Child Support deductions payable follow the same rules.
Note: The threshold to file electronically using ir-file remains at $100,000.
Provisional Tax is payable in 3 installments unless a taxpayer qualifies as a new provisional taxpayer, or files GST six monthly or adopts the ratio method. From the 2008-09 year, provisional tax payments are aligned with GST payment dates. Provisional tax can be calculated using the standard (uplift method) or the estimation method or the ratio method if you are registered for GST. Provisional tax for individuals for 2012 is calculated at 95% of 2010 or 2011 RIT(residual income tax ). If the result is below $2,500 then no provisional tax is due for 2012. After the 2012 year, the formula will gradually change back to normal. By the 2014 year, provisional tax due will be 2013 RIT + 5% or 2012 RIT + 10%. 2012 Provisional tax for companies is calculated at 100% of the 2011 RIT or 105% of 2010 RIT. 2013 Provisional tax for companies is calculated at 105% of 2011 RIT or 105% of 2010 RIT. 2014 Provisional tax for companies is calculated at 105% of 2013 RIT or 110% of 2012 RIT. For non-individuals, use of money interest is payable on shortfall of terminal tax from the 1st installment date until the terminal tax is paid. For individuals, use of money interest is payable from the 1st installment date where their RIT exceeds $50,000 or the taxpayer has estimated their provisional tax. Provisional tax for Trusts from 2012 onwards is calculated at 105% of the previous years RIT or 110% of the two years previous RIT (eg 110% of 2010 RIT).
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:
| 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.