nz-income-tax-ir3

Section 1 -- Quick Reference

Quick Reference table

Field	Value
Country	New Zealand (Aotearoa)
Tax	Income Tax (progressive 10.5%-39%) + ACC Earner Levy
Currency	NZD only
Tax year	1 April to 31 March (FY 2025 = 1 April 2024 to 31 March 2025)
Primary legislation	Income Tax Act 2007 (NZ)
Supporting legislation	Tax Administration Act 1994; Goods and Services Tax Act 1985
Tax authority	Inland Revenue (Te Tari Taake)
Filing portal	myIR (myir.ird.govt.nz)
Filing deadline	7 July (self-filers); 31 March of following year (with tax agent)
Contributor	Open Accountants Community
Validated by	Pending -- requires sign-off by a NZ Chartered Accountant (CA ANZ)
Skill version	2.0

Income Tax Brackets FY 2025 (1 April 2024 - 31 March 2025) [T1]

Income Tax Brackets FY 2025

Taxable Income (NZD)	Rate	Tax on Band	Cumulative Tax
0 -- 14,000	10.5%	1,470	1,470
14,001 -- 48,000	17.5%	5,950	7,420
48,001 -- 70,000	30%	6,600	14,020
70,001 -- 180,000	33%	36,300	50,320
Over 180,000	39%	on excess	50,320 + 39%

• Tax calculation formula — Tax = cumulative tax for lower bracket + (income - lower bracket threshold) x marginal rate

ACC Levies 2025 [T1]

ACC Levies 2025

Levy	Rate	Base	Cap
Work levy (sole traders)	~NZD 1.33 per NZD 100 of liable earnings	Net self-employment income	NZD 139,384 (maximum liable earnings)
Working safer levy	NZD 0.08 per NZD 100	Same base	Same cap
Earner levy	~NZD 1.33 per NZD 100	Same base	Same cap

• Total ACC rate — Total ACC rate ~NZD 2.74 per NZD 100 of liable earnings (varies by industry -- confirm ACC invoice).
• ACC earner levy vs work levy distinction — ACC earner levy is assessed by IRD alongside income tax. ACC work levy is a separate invoice from ACC and IS a deductible expense.

Provisional Tax [T1]

• Provisional tax requirement — Self-employed taxpayers with Residual Income Tax (RIT) > NZD 5,000 must pay provisional tax.

Provisional Tax methods

Method	Rule
Standard method	105% of prior-year RIT, spread over 3 instalments
Estimation method	Estimate current-year tax, pay in 3 instalments
Ratio method (GST registered)	Available for GST-registered taxpayers; proportional to GST turnover

• RIT formula — RIT = Income tax + ACC earner levy - PAYE and withholding tax credits
• Provisional tax dates (most taxpayers, March balance date) — 28 August, 15 January, 7 May

Independent Earner Tax Credit (IETC) [T1]

IETC table

Income	IETC Amount
NZD 24,000 -- NZD 44,000	NZD 520/year
Phases out above NZD 44,000	Reduces by NZD 13/NZD 1 above NZD 44,000
NZD 48,000+	NZD 0

• IETC conditions — Conditions: no Working for Families, not receiving NZ Super, income between NZD 24,000-48,000.

Conservative Defaults [T1]

Conservative Defaults

Situation	Default Assumption
GST-exclusive vs GST-inclusive unclear	Flag -- income tax uses GST-exclusive amounts (for GST-registered)
Mixed personal/business expense	Non-deductible -- flag for reviewer
Home office deduction claimed	Apply only if dedicated workspace; use floor area proportion
Motor vehicle: business % unclear	Use actual logbook records; if no logbook, default 25% business
Schedular payment withholding rate unknown	Apply 20% default (standard schedular rate)
ACC levy amount uncertain	Use ~2.74% of liable earnings; flag -- actual invoice may differ
Provisional tax method not specified	Standard method (105% of prior year)

Red Flag Thresholds [T1]

Red Flag Thresholds

Flag	Threshold
RIT > NZD 5,000	Provisional tax required -- check if paid
Gross income > NZD 60,000	GST registration mandatory -- verify
Motor vehicle expenses > 50% of all expenses	Logbook scrutiny -- flag
Cash income with no trail	Document carefully; Inland Revenue audit risk
Single contractor relationship (regular, directed work)	Possible employment -- flag

Section 2 -- Required Inputs and Refusal Catalogue

Required Inputs

Minimum viable: Bank statement for the full tax year (1 April - 31 March) in CSV, PDF, or pasted text. Confirmation of GST registration status.

Recommended: All client invoices, schedular payment withholding certificates, motor vehicle logbook (if claiming > 25%), ACC levy invoice, provisional tax payment receipts, prior year IR3.

Ideal: Complete accounting records (Xero/MYOB export), GST return summary, depreciation schedule, prior year Notice of Assessment.

Refusal Catalogue

• R-NZ-1 — Stop -- strip GST from all income and expense figures before computing. Mixed amounts distort the computation. (Income figures include GST but taxpayer is GST-registered.)
• R-NZ-2 — Company income is not personal income. Only dividends/salary from the company appear in the IR3. Escalate. (Company (Ltd) income mixed with personal IR3.)
• R-NZ-3 — Non-resident withholding tax (NRWT) and different rate schedule applies. Escalate. (Non-resident with NZ-source income.)
• R-NZ-4 — Reject undocumented vehicle claim > 25% default. Flag for Inland Revenue. (No motor vehicle logbook but large vehicle claim.)
• R-NZ-5 — Inland Revenue employment test may apply. Do not treat as self-employment without review. (Client relationship appears to be employment.)

Section 3 -- Transaction Pattern Library

This is the deterministic pre-classifier. When a bank statement line matches a pattern, apply the treatment directly. If no pattern matches, fall through to Tier 1 rules in Section 5.

3.1 Income Patterns (Credits)

Income Patterns (Credits)

Pattern	Tax Line	Treatment	Notes
PAYMENT FROM [client] / TFR FROM [client]	Self-employment income	Gross revenue	Standard bank credit from client
INTERNET TFR / ONLINE PAYMENT [client]	Self-employment income	Revenue	NZ online transfer from business client
STRIPE PAYOUT / STRIPE PAYMENTS	Self-employment income -- gross-up	Revenue	Stripe NZ payout; gross-up to pre-fee; fee deductible
PAYPAL TRANSFER / PAYPAL NZ	Self-employment income -- gross-up	Revenue	PayPal net; fee deductible
WINDCAVE SETTLEMENT / EFTPOS NZ SETTLEMENT	Self-employment income -- gross-up	Revenue	NZ card payment providers; gross-up
SQUARESPACE PAYMENTS / SQUARE NZ	Self-employment income -- gross-up	Revenue	Square NZ / Squarespace; gross-up
SCHEDULAR PAYMENT (line annotation)	Schedular income -- gross-up	Revenue	Withholding deducted by payer; gross = net / (1 - WHT rate)
SALARY CREDIT [employer]	Employment income	NOT self-employment income	Separate income category; Form IR4 employer
INTEREST PAID / BANK INTEREST	Interest income	Reportable income	Usually subject to RWT deduction
DIVIDEND [company]	Dividend income	Include gross + imputation credits	Separate income type
IRD REFUND / INLAND REVENUE REFUND	EXCLUDE	Not income	Tax refund
GST REFUND IRD	EXCLUDE	Not income	GST refund -- separate tax
RENTAL INCOME [property]	Rental income -- Schedule E	NOT self-employment income	Different return section

3.2 Expense Patterns (Debits)

Expense Patterns (Debits)

Pattern	Tax Category	Treatment	Notes
RENT [office/workspace] / COMMERCIAL RENT	Office rent -- 100% deductible	Fully deductible	Home office: floor area proportion only
GENESIS ENERGY / MERIDIAN ENERGY / CONTACT ENERGY / MERCURY	Utilities -- business proportion	Deductible	Home office: floor area %; dedicated office: 100%
SPARK NZ / ONE NZ / 2DEGREES	Phone/internet -- business proportion	Deductible	Document business % (commonly 50-80%)
ADOBE / MICROSOFT 365 / GOOGLE WORKSPACE / XERO / MYOB	Software subscriptions -- 100% deductible	Fully deductible	Professional software
CHARTERED ACCOUNTANTS / ACCOUNTANT / TAX AGENT	Accounting/tax fees -- 100% deductible	Fully deductible	Tax preparation fees are deductible
INTERISLANDER / BLUEBRIDGE / AIR NZ / JETSTAR	Travel -- 100% deductible (business purpose)	Fully deductible	Require purpose note; personal travel = 0%
HILTON / IBIS / NOVOTEL / AIRBNB	Accommodation -- 100% deductible (business travel)	Fully deductible	Personal = 0%; require business purpose
Z ENERGY / BP NZ / MOBIL NZ / GULL	Fuel -- deductible (business proportion)	Business portion	Require logbook or 25% default
AA NZ / VEHICLE REGISTRATION / NZTA	Vehicle costs -- deductible (business %)	Business portion	Same logbook rule as fuel
ACC LEVY / ACC INVOICE	ACC work levy -- 100% deductible	Fully deductible	Work levy paid to ACC is deductible; earner levy is in tax computation
INLAND REVENUE PROV TAX / IRD PROVISIONAL TAX	Provisional tax -- NOT deductible	EXCLUDE	Tax prepayments are not expenses
GST PAYMENT IRD	GST payment -- NOT deductible	EXCLUDE	Separate tax; not income tax expense
PROFESSIONAL INDEMNITY INS / PUBLIC LIABILITY INS	Business insurance -- 100% deductible	Fully deductible	Professional and business policies
LINKEDIN PREMIUM / SEEK ADVERTISE / TRADEME JOBS	Business platform subscriptions	Fully deductible	Marketing and recruitment platforms
COURIER POST / NZ POST / DHL NZ	Postage/courier -- 100% deductible	Fully deductible	Business deliveries
BANK FEE / ACCOUNT FEE / ANZ MONTHLY FEE	Bank charges -- 100% deductible	Fully deductible	Business account fees
XERO SUBSCRIPTION / MYOB SUBSCRIPTION	Accounting software -- 100% deductible	Fully deductible	Financial software
TRAINING / COURSE / CONFERENCE	Professional development -- deductible	Fully deductible	Must maintain/improve existing skills; new career = not deductible
SUBCONTRACTOR PAYMENT / CONTRACTOR INVOICE	Subcontract expenses -- deductible	Fully deductible	Schedular withholding obligation may apply
STRIPE FEES / PAYPAL FEES / SQUARE FEES	Payment processing fees -- deductible	Fully deductible	Deduct the gross-up difference
ENTERTAINMENT / MEALS CLIENT	Entertainment -- 50% deductible	50% only	Entertainment deduction limitation

Section 4 -- Worked Examples

Example 1 -- ANZ NZ (Auckland, IT Consultant)

Input line (ANZ Business One CSV): 03/01/2025,,PAYMENT FROM ACME LTD,,11500.00,

Reasoning: Payment from business client. If James is GST-registered, this NZD 11,500 may be GST-inclusive. Ex-GST amount = NZD 11,500 / 1.15 = NZD 10,000. For income tax, use the ex-GST figure.

Classification: Self-employment income NZD 10,000 (ex-GST if registered).

Example 2 -- Westpac NZ (Auckland, Photographer -- Vehicle Claim)

Input line (Westpac Business Online CSV): 10/08/2025,SHELL SELECT QUEENSTOWN,120.00,,

Reasoning: Petrol NZD 120. Emma drives a personal car for client shoots. Business km logged: 8,400/14,000 total = 60% business (logbook maintained for 90+ days). Deductible portion: NZD 120 x 60% = NZD 72. Without logbook, default is 25% = NZD 30.

Classification: Motor vehicle expense NZD 72 (60% business per logbook). If no logbook: NZD 30 (25% default).

Example 3 -- ASB Bank (Christchurch, Plumber -- Schedular Payment)

Input line (ASB Business Edge CSV): 15/03/2025,SCHEDULAR PAYMENT BUILDCO LTD,-,4000.00,

Reasoning: Schedular payment received NZD 4,000. Building company withheld 20% tax before paying. Gross income = NZD 4,000 / (1 - 0.20) = NZD 5,000. Withholding tax credit = NZD 1,000. Report NZD 5,000 as gross income and claim NZD 1,000 as withholding credit.

Classification: Self-employment income NZD 5,000 (gross). Withholding credit NZD 1,000.

Example 4 -- BNZ (Wellington, Marketing Consultant)

Input line (BNZ Business CSV): 28/02/2025,TT,STRIPE PAYOUT,CODE,REF,2185.00,

Reasoning: Stripe NZ payout NZD 2,185. Stripe collected approximately NZD 2,254 from clients and deducted ~NZD 69 in fees. Gross revenue = NZD 2,254 (ex-GST if GST-registered). Stripe fee NZD 69 is deductible.

Classification: Gross revenue NZD 2,254. Stripe fees NZD 69 deductible.

Example 5 -- Kiwibank (Dunedin, Freelance Writer -- Foreign Income)

Input line (Kiwibank CSV): 20/05/2025,PAYPAL TRANSFER USD,,,1850.00,

Reasoning: PayPal payout NZD 1,850 from overseas clients paid in USD. Foreign currency income must be converted to NZD at the Reserve Bank mid-rate on the date of receipt (or annual average rate by agreement). The NZD equivalent at receipt date is the income figure.

Classification: Self-employment income NZD 1,850 (converted at receipt-date rate).

Example 6 -- ANZ (Hamilton, E-commerce Seller -- GST Check)

Input line (ANZ FastNet Business CSV): 01/09/2025,,WINDCAVE SETTLEMENT,,8500.00,

Reasoning: Windcave card payment settlement NZD 8,500. Rachel's annual gross revenue is NZD 95,000 -- above the NZD 60,000 GST registration threshold. She must be GST-registered. All figures must be ex-GST for income tax: NZD 8,500 / 1.15 = NZD 7,391.30.

Classification: Revenue NZD 7,391.30 (ex-GST). RED FLAG: verify GST registration.

Section 5 -- Tier 1 Rules (When Data Is Clear)

5.1 GST-Registered: Always Use Ex-GST Amounts

• GST-registered ex-GST rule — For GST-registered taxpayers, all income and expenses in the IR3 must be reported exclusive of GST. Strip 3/23 (for 15% GST) from GST-inclusive amounts. Apply without escalating.

5.2 ACC Earner Levy Is Included in Tax Payment

• ACC earner levy treatment — The ACC earner levy (~1.33% of liable earnings) is assessed by IRD alongside income tax and paid with the IR3 balance. It is NOT a separate payment to ACC. The ACC work levy IS a separate invoice from ACC and IS a deductible expense. Apply this distinction consistently.

5.3 Entertainment: 50% Limitation

• Entertainment limitation rule — Business meals and entertainment are limited to 50% deductible under the Income Tax Act. Apply 50% to all restaurant, cafe, and entertainment narrations where a business purpose is noted. Social/personal entertainment = 0%.

5.4 Provisional Tax Is Not Deductible

• Provisional tax not deductible rule — Provisional tax instalments paid to IRD are not deductible business expenses. They are advance payments of income tax. Always exclude them from the expense calculation.

5.5 Motor Vehicle Logbook Required for > 25% Business Use

• Motor vehicle logbook rule — Claims above the default 25% business use require a logbook maintained for a minimum of 90 consecutive days at least once every three years. If no logbook is available, cap business use at 25%. Never claim > 25% without logbook evidence.

5.6 Schedular Payments: Always Gross Up

• Schedular payment gross-up rule — When income was subject to schedular withholding, gross income = amount received / (1 - withholding rate). The withheld amount is a tax credit. Always gross up before entering in the income section.

5.7 Foreign Currency Income: Use NZD at Date of Receipt

• Foreign currency income rule — Income received in foreign currencies must be converted to NZD at the exchange rate on the date of receipt (or annual average rate by agreement). Use Reserve Bank of NZ indicative rates. Do not convert at year-end rate.

5.8 Tax Computation Flow

• Tax Computation Flow — Gross self-employment receipts (ex-GST if registered) Less: Allowable business expenses = Net taxable income Apply bracket rates Less: IETC (if income NZD 24,000-48,000) = Net income tax Plus: ACC earner levy (~1.33% of liable earnings) = Total tax Less: Schedular withholding credits Less: Provisional tax paid = Residual Income Tax (RIT) / refund

5.9 Filing Deadlines

Filing Deadlines

Item	Deadline
IR3 due (self-filers)	7 July of following year
IR3 due (with tax agent)	31 March of second following year
Terminal tax	7 February of following year
Provisional tax (March balance date)	28 August, 15 January, 7 May

5.10 Penalties

Penalties

Offence	Penalty
Late filing	NZD 50/month up to NZD 300
Late payment	1% initial + 4% incremental (after 7 days) + 1.5%/month ongoing
Shortfall penalties (not taking reasonable care)	20% of shortfall
Shortfall (unacceptable interpretation)	20%
Shortfall (gross carelessness)	40%
Shortfall (evasion)	150%

Section 6 -- Tier 2 Catalogue (Reviewer Judgement Required)

6.1 Mixed Company/Personal Income

Company income not reportable in IR3; only salary/dividends from the company appear. Clarify business structure before proceeding.

6.2 Rental Property Income

Separate schedule in IR3. Different deductibility rules -- interest deductibility limited post-Brightline reform. Ring-fenced rental losses may apply.

6.3 Brightline Property Sale

10-year Brightline test: gains on residential property sold within 10 years are taxable. Complex rules; confirm purchase and sale dates.

6.4 Working for Families Tax Credits

IETC cannot be claimed alongside WFF. Complex abatement on WFF. Confirm eligibility before applying either IETC or WFF.

6.5 Non-Resident NZ-Source Income

Non-resident withholding tax (NRWT) applies with different rates. Do not apply resident rates.

6.6 Imputation Credits on Dividends

Dividends gross + imputation credits both reportable. Imputation credit is a tax credit. Require dividend statement from company.

6.7 Losses in Prior Years

NZ allows carrying forward business losses. Prior-year losses reduce current taxable income if criteria met. Confirm with prior year return.

Section 7 -- Excel Working Paper Template

NEW ZEALAND INCOME TAX WORKING PAPER (IR3 -- SELF-EMPLOYED)
Taxpayer: _______________  IRD Number: _______________  FY: 1 April 2024 - 31 March 2025

SECTION A -- SELF-EMPLOYMENT INCOME (ex-GST)
                                        NZD
Gross self-employment receipts         ___________
Less: GST component (if incl.)         (___________)
Net ex-GST income                      ___________
Schedular income (grossed up)          ___________
Other business income                  ___________
TOTAL INCOME                           ___________

SECTION B -- DEDUCTIBLE EXPENSES
Rent / workspace (business portion)    ___________
Utilities (business proportion)        ___________
Phone / internet (business %)          ___________
Software subscriptions                 ___________
Accounting / tax agent fees            ___________
Legal fees                             ___________
Travel (business trips)                ___________
Accommodation (business travel)        ___________
Meals & entertainment (50%)            ___________
Business insurance                     ___________
Bank charges (business account)        ___________
Motor vehicle (logbook %)              ___________
ACC work levy                          ___________
Depreciation                           ___________
Subcontractor costs                    ___________
Payment processor fees                 ___________
Other business expenses                ___________
TOTAL DEDUCTIBLE EXPENSES              ___________

SECTION C -- NET TAXABLE INCOME
Total income - Total expenses          ___________

SECTION D -- INCOME TAX
Tax at bracket rates (see table)       ___________
Less: IETC (if income NZD 24k-48k)    (___________)
NET INCOME TAX                         ___________

SECTION E -- ACC EARNER LEVY
Net income x 1.33%                     ___________

SECTION F -- RIT AND PROVISIONAL TAX
Income tax + ACC - withholding credits ___________
Less: provisional tax paid             (___________)
RIT BALANCE DUE / (REFUND)             ___________
Next year provisional (105% of RIT):   ___________

SECTION G -- REVIEWER FLAGS
[ ] GST stripped from income/expenses (if GST-registered)?
[ ] Schedular payments grossed up and withholding credit recorded?
[ ] Motor vehicle logbook reviewed -- business % substantiated?
[ ] Entertainment capped at 50%?
[ ] Home office -- floor area proportion documented?
[ ] ACC work levy invoice included as expense?
[ ] Provisional tax instalments reconciled against IRD account?
[ ] Foreign income converted to NZD at receipt-date rate?

Section 8 -- Bank Statement Reading Guide

New Zealand Bank Statement Formats

NZ Bank Statement Formats

Bank	Format	Key Fields
ANZ NZ	CSV	Date,Description,Debit,Credit,Balance
BNZ (Bank of New Zealand)	CSV	Date,Tran Type,Particulars,Code,Reference,Amount,Balance
ASB Bank	CSV	Date,Unique Id,Tran Type,Cheque Number,Payee,Memo,Amount
Westpac NZ	CSV	Date,Narrative,Debit Amount,Credit Amount,Balance
Kiwibank	CSV	Date,Description,Debit,Credit,Balance

Key NZ Banking Narrations

Key NZ Banking Narrations

Narration	Meaning	Classification Hint
PAYMENT FROM [name] / TFR FROM [name]	Bank transfer in	Potential business income
INTERNET TFR	Online transfer	Income or expense
D/C (Direct Credit)	Direct credit	Potential income
D/D (Direct Debit)	Direct debit	Recurring expense
ATM WITHDRAWAL	Cash withdrawal	Personal -- investigate
IRD PROV TAX / INLAND REVENUE	Tax payment	Tax prepayment -- exclude
GST PAYMENT	GST remittance	Separate tax -- exclude
INTEREST	Bank interest	Other income
ACC LEVY	ACC payment	Work levy deductible; earner levy in tax

NZ Three-Part Narration (Particulars/Code/Reference)

NZ bank-to-bank transfers allow three fields the sender fills in:

• Particulars: Usually the payer's name or invoice reference
• Code: Account code or project reference
• Reference: Invoice number, date, or other identifier

Combine all three to identify transaction source.

Amount Format Notes

• Date format: DD/MM/YYYY
• Amount format: no thousands separator, period decimal (e.g., 11500.00)
• ANZ/Westpac: separate Debit/Credit columns
• BNZ/ASB: single Amount column (positive = credit, negative = debit)

Section 9 -- Onboarding Fallback

If the client provides a bank statement but cannot answer onboarding questions immediately:

1. Classify all PAYMENT FROM / TFR FROM credits from non-personal sources as potential self-employment income
2. Apply conservative defaults: non-GST registered (use face value), 25% vehicle default, no IETC
3. Exclude all IRD PROV TAX and GST PAYMENT debits from expenses
4. Mark all Stripe/PayPal/Windcave for gross-up
5. Flag all entertainment at 50% pending confirmation
6. Generate working paper with PENDING flags

Present these questions:

ONBOARDING QUESTIONS -- NEW ZEALAND INCOME TAX (IR3)
1. Are you GST-registered? If so, are your bank statement amounts GST-inclusive or exclusive?
2. Tax year: are we preparing FY ended 31 March 2025?
3. Do you use a vehicle for work? If so, do you have a logbook (90+ consecutive days)?
4. Do you work from a dedicated home office? What % of floor area?
5. Did any clients deduct schedular withholding tax before paying you? At what rate?
6. Prior year RIT: did you pay provisional tax this year? How much?
7. Do you receive Working for Families tax credits?
8. Any income from rental properties?
9. Did you receive dividends from NZ companies? (Imputation credits)
10. Any foreign currency income? From which countries?

Section 10 -- Reference Material

Key Legislation

Key Legislation table

Topic	Reference
Income tax (general)	Income Tax Act 2007 (NZ)
Filing and penalties	Tax Administration Act 1994
GST (separate)	Goods and Services Tax Act 1985
Schedular payments	Income Tax Act 2007 Part R
Entertainment limitation	Income Tax Act 2007 subpart DD
Depreciation	Income Tax Act 2007 subpart EE
ACC levies	Accident Compensation Act 2001

Known Gaps / Out of Scope

• Company (Ltd) income tax
• Non-resident NZ-source income (NRWT)
• Brightline property gains (complex)
• Working for Families calculations
• GST return computation
• KiwiSaver employer contribution calculations

Changelog

Changelog table

Version	Date	Change
2.0	April 2026	Full rewrite to v2.0 structure; NZ bank formats (ANZ, BNZ, ASB, Westpac, Kiwibank); transaction pattern library; Windcave/PayNow patterns; worked examples; PROHIBITIONS and disclaimer added
1.0	2025	Initial version

Self-Check

• GST stripped from all amounts for GST-registered taxpayers?
• Schedular payments grossed up (not net bank receipt)?
• Motor vehicle claim supported by logbook or capped at 25%?
• Entertainment limited to 50%?
• ACC earner levy added to tax (not as a separate expense)?
• ACC work levy included as deductible expense?
• Provisional tax excluded from expenses?
• Foreign currency converted at receipt-date rate?
• RIT correctly computed (income tax + ACC earner levy - withholding)?

PROHIBITIONS

• NEVER include GST-inclusive amounts in income or expenses for GST-registered taxpayers -- always strip GST first
• NEVER claim motor vehicle business use above 25% without a qualifying logbook (90+ consecutive days)
• NEVER allow entertainment deductions above 50% of the cost
• NEVER include provisional tax or GST payments as deductible business expenses
• NEVER apply IETC if the taxpayer receives Working for Families tax credits or NZ Super
• NEVER confuse ACC earner levy (in tax computation) with ACC work levy (deductible expense)
• NEVER convert foreign currency income at year-end rate -- use receipt-date rate
• NEVER treat schedular payment net receipts as gross income -- always gross up
• NEVER apply resident rates to non-residents -- escalate
• NEVER present tax calculations as definitive -- always label as estimated and direct client to their Chartered Accountant for confirmation

Disclaimer

This skill and its outputs are provided for informational and computational purposes only and do not constitute tax, legal, or financial advice. Open Accountants and its contributors accept no liability for any errors, omissions, or outcomes arising from the use of this skill. All outputs must be reviewed and signed off by a qualified professional (such as a Chartered Accountant CA ANZ, or equivalent licensed practitioner in New Zealand) before filing or acting upon.

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