Starting a Business

If You Don’t File Returns
The law requires that taxpayers file their tax returns on time. If they don't, they may be up for late filing penalties. For income tax and ACC a late filing penalty is levied only if a return is required and one is not filed or a valid reason not given for the non filing.

In general, the IRD will notify the taxpayer first by letter that a late filing penalty may be imposed if a return is not sent in.

If You Don't Pay Your Tax
If you don’t pay your tax in full and on time, IRD will charge you late payment penalties and interest on amounts over $100.

The IRD will try to work out a payment arrangement with you before taking any serious action to recover outstanding debt. You must contact them for an arrangement to be considered.

If you know that you will not be able to pay your tax on time or if you currently have debt outstanding, there are a number of options available to you.

Contact your tax adviser first then the IRD (usually through your adviser) if it looks like you need help.

Offences and Penalties
Tax law sets out that the purpose of the penalties imposed by the IRD are to:

Encourage taxpayers to comply voluntarily with their tax obligations and to cooperate with the IRD.

To levy penalties for breaches of any tax obligation in keeping with the seriousness of the particular breach.

If a taxpayer fails to meet their tax obligations it could result in civil penalties or criminal penalties, or both.

Offences and Penalties are therefore broken into 2 groups

  1. Civil Offences and Penalties
  2. Criminal Offences and Penalties

Want More Detailed Information?

Go to “Starting a Business” - HERE