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 Resident withholding tax (RWT) is a tax on interest and dividends you earn from your bank accounts and investments in New Zealand and overseas 1 . RWT is withheld for interests 2 and investment income that takes the form of dividends 3 . The banker or fund manager should deduct RWT from the interest or dividend before making a payment.  1 . https://www.ird.govt.nz/income-tax/withholding-taxes/resident-withholding-tax-rwt 2. https://www.ird.govt.nz/-/media/project/ir/home/documents/forms-and-guides/ir200---ir299/ir283/ir283-2020.pdf 3. https://www.ird.govt.nz/-/media/project/ir/home/documents/forms-and-guides/ir200---ir299/ir284/ir284-2020.pdf

A  ultimate holding company is a company, that has controlling interest in another company's board, management and policies, usually by having a majority shareholding. 1 Companies Act, Part 1 2 , defines an ultimate holding company as, ultimate holding company, in relation to a company, means a body corporate that (a) is a holding company of the company; and (b)is itself not a subsidiary of any body corporate. Part 18 of the Companies Act 3  allows Overseas companies to register in New Zealand. So overseas ultimate holding companies could register in New Zealand by virtue of these two. 1. https://companies-register.companiesoffice.govt.nz/help-centre/starting-a-company/ultimate-holding-companies/ 2. https://www.legislation.govt.nz/act/public/1993/0105/latest/DLM319576.html 3. https://www.legislation.govt.nz/act/public/1993/0105/latest/whole.html#DLM322861

Is the fees for Website domain registration,  an allowable deduction?  The underlying question being, is this expense of a capital or revenue nature. Capital expenses have to be written off annually using depreciation while  Revenue expenses can be expensed in the current year itself. Applicable capital/revenue tests as established by case law are 1 is it of a one-off nature? does it give rise to an enduring benefit? is it part of the business structure of a taxpayer?  Therefore, expenditure incurred in acquiring a domain name is capital expenditure  1 , as it is of a one of nature, giving rise to an enduring benefit and part of the business structure of the taxpayer. Revenue Deductions are allowed under Part D of the ITA, 2007. 2 But Customers can claim an immediate tax deduction for assets costing less than a threshold of $1000. 3 1. https://www.taxtechnical.ird.govt.nz/en/questions-we-ve-been-asked/2000/website-expenditure-deductibility 2. https://www.legisla...

A tax position is a decision that you might make when filing a tax return. An unacceptable tax position is a decision you've made that is more likely to be wrong than right.  UTP(Unacceptable Tax Position) ShortFall Penalty can be imposed in some instances. 1 An area where unacceptable tax positions can arise is decisions on whether certain expenditures are of a capital or revenue nature. Whether expenditure is of a capital or revenue nature is not to be found by any rigid test or description but upon consideration of all the circumstances; if capital in nature, it is not deductible for income tax purposes. 2 Capital expenditures are denied a deduction. This rule is called capital limitation. 3 1. https://www.ird.govt.nz/managing-my-tax/penalties-and-interest/penalties-and-debt/shortfall-penalties 2. https://www.taxtechnical.ird.govt.nz/-/media/project/ir/tt/pdfs/case-summaries/csum-21-02.pdf 3. https://www.legislation.govt.nz/act/public/2007/0097/latest/DLM1513558.html

 A Cash flow forecast is a projection of the incoming and outgoing cash for a given period. 1 Cash flow forecasting helps in good and bad times. It is vital to see whether money is running out in bad times. In good times it helps to locate the cash resource helpful in growing operations. Xero Template for cash flow forecasting ANZ Template for cash flow forecasting Start with how money comes into the business and then with how money goes out of the business. The net cash flow for a period can be positive or negative. Past trends of cash flow can be helpful in forecasting future cash flows. 1. https://www.business.govt.nz/tax-and-accounting/business-finance-basics/cash-flow-forecasting/

New Zealand Resident Sole Traders can use the IR3 - Individual income tax,  to supply their tax position to the IRD. 1 2 IR3 is required if a person receives an income of more than $200(before tax). 3  If Shareholder-employees had received a salary with no PAYE deducted, this income has to be shown in their individual IR3. 3 A company has to return an IR10, which is a financial statement Summary. 1 4  IR7 can be used for partnerships and Look Through Companies(LTC). 5 1 .  https://www.ird.govt.nz/-/media/project/ir/home/documents/forms-and-guides/ir300---ir399/ir320/ir320-2022.pdf 2. https://www.ird.govt.nz/income-tax/income-tax-for-individuals/what-happens-at-the-end-of-the-tax-year/individual-income-tax-return---ir3 3.  https://www.ird.govt.nz/-/media/project/ir/home/documents/forms-and-guides/ir1---ir99/ir3g/ir3g-2022.pdf 4.  https://www.ird.govt.nz/-/media/project/ir/home/documents/forms-and-guides/ir1---ir99/ir10/ir10-2016-onwards.pdf 5.  htt...

When premises are used partly for business purposes and partly for other purposes, a square metre rate can be used to calculate the deduction. 1 This calculation methodology requires calculating the area of the buildings on the premises used primarily for business(in square metres). This area needs to be obvious and identifiable as being used for business purpose.  This area also needs to be used for the business purpose more than 50% of the time. 2 The formula provided in the ITA 2007 1 ,  inserted by Taxation (Business Tax, Exchange of Information, and Remedial Matters) Act 2017 is (total premise costs × business proportion) +  (business square metres × square metre rate). The part, business square metres × square metre rate, gives the cost of utilities available as deductions. The part, total premise costs × business proportion, calculates mortgage interest, rates or rent available as deduction 1. https://www.legislation.govt.nz/act/public/2007/0097/latest/DLM151...

An amount can be paid to a shareholder employee, which will be treated as income other than from a PAYE Income for the shareholder employee. For this, the share holder employee should not derive regular salaries or wages of a regular amount for regular pay periods of one month or less and he/she should derive less than 66% of their annual gross income as wages or salaries. Shareholders of look through companies cannot derive shareholder salary. 1 This amount of shareholder salary is allowed as a deduction as an amount of expenditure on employment income, and its payment period is extended until that last day by which a shareholder employee should file his/her return. 2 1. https://www.legislation.govt.nz/act/public/2007/0097/latest/DLM7224992.html Income Tax Act 2007 Part R - General collection rule Subpart RD - Employment-related taxes RD 3B - Shareholders who are employees, for some companies: income other than PAYE 2. https://www.legislation.govt.nz/act/public/2007/0097/latest/DLM151...

  Questions asked to the IRD QB 10/11, is regarding reimbursing shareholder - employees for the private use of their motor vehicle. 1  Payment made by an employer for expenditure incurred by an employee is called expenditure on account of an an employee. 2  This is an exempt income for the employee. 3 Share-holders employees of a close company with no PAYE INCOME can receive re-imbursements for the use their private vehicle. 4 The mileage rate set by the commissioner is one option calculating this expense to be reimbursed. 4 1. https://www.taxtechnical.ird.govt.nz/en/questions-we-ve-been-asked/2010/qb-1001-reimbursing-shareholder-employees-for-motor-vehicle-expenses-and-the-use-of-the-commissioner 2. https://www.legislation.govt.nz/act/public/2007/0097/latest/DLM1512790.html#DLM1512790 3. https://www.legislation.govt.nz/act/public/2007/0097/latest/DLM1513183.html 4. https://www.taxtechnical.ird.govt.nz/en/operational-statements/os-0901-commissioner-s-statement-of-a-mile...

The choice of election between the kilometre rate method or the costs methods in Income Tax 2007 was inserted by the Taxation (Business Tax, Exchange of Information, and Remedial Matters) Act 2017. 1 This act 2 also made the apportioning applicable to a close company. The definitions part of the Income Tax Act 3 defines a close company as one which has 5 or fewer natural persons whose voting interest makes up more than 50%.  The business use of a motor vehicle by a shareholder-employee of the close company will be treated as business use by the close company. 4 1. https://www.legislation.govt.nz/act/public/2017/0003/latest/DLM6912564.html 2. https://www.legislation.govt.nz/act/public/2017/0003/latest/DLM6912562.html 3. https://www.legislation.govt.nz/act/public/2007/0097/latest/DLM1520575.html 4. https://www.legislation.govt.nz/act/public/2007/0097/latest/DLM1513841.html

Operational statement 19/04A 1 sets out the commissioner's statement on using a kilometre rate for business deductions of a running motor vehicle - deductions. Income Tax Act 2007 Section DE 2B, Election to use kilometre rate method or costs method 2 in Subpart DE—Motor vehicle expenditure, prescribes the election of either a kilometre rate method or a cost method for apportioning the use of a motor vehicle when it's partly used for business and other purposes. If no election is done, the cost method is assumed. Once a method is elected it cannot be revoked. Section DE6 - DE11 deals with using a logbook. 1.https://www.taxtechnical.ird.govt.nz/-/media/project/ir/tt/pdfs/operational-statements/os-1904a.pdf 2.https://www.legislation.govt.nz/act/public/2007/0097/latest/DLM7271117.html

The procedure offered in the Companies Act 1993 when a debtor company unable is to pay its debt, is issuing a statutory demand. 1 A statutory demand when served on a company in writing, gives it 15 working days to respond. The debtor company can apply to the court to set aside an statutory demand issued to it. 2  The court, if it finds no reason to set aside a statutory demand, can order the debtor company to pay or make an order to place the company in liquidation. 3 1. https://www.legislation.govt.nz/act/public/1993/0105/latest/DLM321970.html 2. https://www.legislation.govt.nz/act/public/1993/0105/latest/DLM321971.html 3. https://www.legislation.govt.nz/act/public/1993/0105/latest/DLM321973.html

 The business use component of the private vehicle use can be charged as a business expense. 1 A logbook 3 can be used to calculate the kilometers ran for business use and kilometer rates from IRD can be used to calculate the business costs.  For a vehicle than ran 14,000 kilometers, be it petrol, diesel, electric or hybrid, 83 cents can be charged as cost for kilometers listed in a logbook. This is the kilometer rate prescribed by the IRD for 2021-2022 year. 2        Actual costs can also be used in charging business costs. Accurate details of vehicle expenses, which includes buying petrol, getting a warranty of fitness, paying for maintenance, insurance and parking needs to be kept if this method is to be used.  The log book in this case needs to show kilometers and reasons for business travel  and  kilometers travelled for personal use, as costs need to be apportioned 1. https://www.ird.govt.nz/vehicle-expenses 2. https://www.ird.govt.nz/...