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• Donations of $5 or more to an approved charity, or
  
• Payment for childcare or a housekeeper (under certain conditions)
  

• For donations made from 31 March 2009 and future years you can claim the lesser of 33.3333% of the total donation you have made, or 33.3333% of your taxable income .
  
• For donations of $1,890 or more your rebate will be $630 from 2003 onwards.
  
• For donations of $1,500 or more your rebate will be $500 for 2002 and previous years
  
• If you've paid $940 or more for childcare or a housekeeper, your rebate will be $310
  

• Earned taxable income during the period being claimed for, and
  
• Were resident in New Zealand at any time during the tax year
  

The total qualifying donations, childcare and housekeeper payments you can claim can't exceed your taxable income. If you have a spouse or partner, they may claim your excess receipts (for more information read the section of the IRD website).

Companies
If a company makes a donation to a donee organisation it can claim a deduction. The maximum deduction it can claim is limited to the amount of its net income, calculated before taking into account the deduction. read more...

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
  

All other entertainment expenditure is fully deductible, provided the entertainment aspect is merely incidental read more...

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

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Fringe benefit tax (FBT) is a tax on benefits that employees receive as a result of their employment, including those benefits provided through someone other than an employer.

• Motor vehicles (refer to the IRD website form more information on how to calculate)
  
• Low-interest loans other than low-interest loans provided by life insurance companies
  
• Free, subsidised or discounted goods and services, including subsidised transport for employers in the public transport business
  
• Employer contributions to sick, accident or death benefit funds, superannuation schemes and specified insurance policies

Gifts, prizes and other goods are fringe benefits. If you pay for your employees' entertainment or private telecommunications use, these benefits may also be liable for fringe benefit tax.
Refer to the IRD website (or contact us) for more information on how fringe benefit tax is applied and calculated on:

• Motor vehicles
  
• Low interest loans
  

Alternatively, the IRD website provides a fringe benefit tax multi-rate calculator to calculate FBT for a single employee.

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Gift duty is imposed by section 61 of the Estate and Gift Duties Act 1968.
For gift duty purposes, a gift is something given:

• When nothing is received in return, or
  
• When something is received in return, but its value is less than the value of the property given
  

If something of lesser value is given in return for a gift, the value of the gift, for gift duty purposes, is the difference between the two values. These items can all be gifts:

• Transfers of any items (for example, company shares or land)
  
• Any form of payment
  
• Creation of a trust
  
• Employer contributions to sick, accident or death benefit funds, superannuation schemes and specified insurance policies
  
• A forgiveness or reduction of debt
  

If you made a gift before 1 October 2011 of more than $27,000 in any 12-month period, you will have to pay gift duty. You must complete a Gift Statement and forward it to the IRD. In some cases, gifts must be recorded with IRD even if they are not liable for duty. For example, you must fill in a Gift statement (IR196) if you made gifts before 1 October 2011 with a combined total value of over $12,000 in any 12-month period.

Changes have been made to sections 2(2) and 61 of the Estate and Gift Duties Act so that gifts made on or after 1 October 2011 are no longer liable for gift duty and you no longer need to file any documents with IRD. The donor or agent remains responsible for keeping and maintaining records of the amount of debt that has been forgiven.

Gifts made to create a charitable trust, or for establishing any society or institution exclusively for charitable purposes, or any gift in aid of such trust, society, or institution are exempt from gift duty.

Allowing a debt to remain outstanding so that it can't be collected by normal legal action.
To find out more about paying gift duty see the IRD website.

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GST is a tax on the supply of goods and services in New Zealand by a registered person on any taxable activity they carry out. The rate for GST is 15% although it can be zero-rated for exports.
Certain supplies of goods and services are ’exempt supplies’. These include:

• Certain financial services
  
• Sale or lease of residential properties
  
• Wages/Salaries and most Directors Fees
  

GST registration is required if the annual turnover of the business for a 12-month period exceeds or is expected to exceed $60,000. If your turnover exceeds $250,000 pa you must file your GST return monthly or bi-monthly.

There are three methods of accounting for GST:

• Invoice Basis
  
• Payments Basis
  
• Hybrid Basis
  

If your turnover exceeds $1,300,000 pa you must use the invoice basis.

If you are selling or are thinking of selling your products through your website please also refer to our section on GST and E-Commerce.

For more information on GST see the GST section of the IRD website.

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If a GST-registered person sells goods via the internet and the goods are physically supplied to a customer in New Zealand, GST is chargeable at 15%. If goods are sold via the internet and physically supplied to customers overseas the sales can be zero-rated for GST purposes. It is important to prove the goods have been exported (entered for export by the supplier) and sufficient evidence should be held to prove the export.

Sale of Digital Goods via the Internet
If a GST-registered person sells digital products via the internet which are downloaded such as music, software or digital books, to a New Zealand customer they must charge 15% GST. (These products are treated as services for GST purposes). If digital products are sold via the internet and downloaded by an overseas customer they can be zero-rated but it is important to prove that the products are ’exported’ otherwise GST must be charged.

Note: Evidence required to prove products are exported

For more information on GST & E-Commerce see section of GST & E-Commercethe the IRD website

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For tax purposes, a person is considered a non-resident if they have come to New Zealand and stayed less than 183 days in a 12-month period, or do not have an ”enduring relationship” with New Zealand.

A non-resident is liable for tax on income for personal services carried out in New Zealand, and on other payments from New Zealand sources.

Non-resident employees are taxed PAYE on their wages just as resident employees are. However, a non-resident may claim exemptions under either a 'double taxation agreement', or 'the 92-day ' rule.

If you hire and pay a non-resident individual or company as a contractor, withholding tax needs to be deducted from payments for the specified contract activities or services. Employers are also required to deduct withholding tax from payments to non-resident entertainers, unless the performance:

• is part of a sponsored cultural programme for the government of New Zealand or a foreign country or
  
• forms part of a programme of an overseas non-profit organisation or
  
• relates to a game or sport in which the participants are official representatives of the organisation administering the game or sport in an overseas country
  

A non-resident who is carrying on or intends to carry on a taxable activity may elect to register for GST.

Depending on the value of supplies made in New Zealand, there are also circumstances in which a non-resident may also be required to register for GST. Supplies are deemed to be made in New Zealand if the goods are in New Zealand at the time of supply, or if the services are physically performed in New Zealand. For more details  see the section of IRD website .

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Pay As You Earn (PAYE) is the basic tax taken out of your employees' salary or wages. The amount of PAYE you deduct depends on your employee's tax code.

PAYE employees must complete a Tax code declaration (IR 330) as soon as they start working for you. If an employee fails to complete the tax code declaration, you must deduct PAYE at the no-declaration rate.

Every month you must file an employer monthly schedule detailing each worker's gross earnings and deductions.

If you are a small employer with gross annual PAYE deductions of less than $100,000, the schedule and payment are made on the 20th of the month following the deductions.

If you are a large employer with gross annual PAYE deductions of $100,000 or more, the deductions made from payments made to workers between the:

• 1st and the 15th of the month are paid by the 20th of the same month
  
• 16th and the end of the month are paid by the 5th of the following month ( except for December, payment is to be made by 15 January). The employer monthly schedule is filed along with this payment.
  

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Provisional tax is not a separate tax but a way of paying your income tax as the income is received through the year. Instalments of income tax are paid during the year, based on what you expect your tax bill to be. The amount of provisional tax you pay is then deducted from your tax bill at the end of the year.

If your residual income tax is $2,500 or more you will have to pay provisional tax for the following year. Residual income tax is the tax payable after subtracting any rebates you are eligible for and any tax credits (excluding provisional tax). Residual income tax is clearly labeled in the tax calculation in your tax return. To understand provisional tax, read more... .

Due dates
The number of times you need to pay provisional tax each year depends on the option you use to calculate your provisional tax, and how many times you pay GST (if registered).

If you're registered for GST you pay your provisional tax and GST at the same time on a combined GST and provisional tax return. If you have another balance date (ie your tax year ends before or after 31 March) you can work out your due dates with tax due date calculator.
For additional information see the IRD website..

Interest
In some circumstances you may be charged interest if the provisional tax you paid is less than your residual income tax. If the provisional tax you pay is more than your residual income tax, the IRD may pay you interest on the difference. For more details see the IRD website .

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Taxpayers who do not meet their tax obligations may face penalty or interest charges. To avoid such charges, you should pay the full amount of tax you owe by the due date.

The main kinds of charges for failing to meet tax obligations are:

• a shortfall penalty where the correct amount of tax is higher than the amount you paid (eg, because of an understatement of tax, or where the amount of a refund or loss is reduced) read more...
  
• a late payment penalty if you post or deliver a payment to us after the date it was due read more...
  
• a late filing penalty if you do not file a return by the due date read more...
  
• interest on the amount of tax you owe if you have underpaid your tax. The interest rates charged are based on market rates read more...
  

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