Uncluttered workspace: IRD simplify tax obligations and donations tax credit claims

Inland Revenue's ongoing and far-reaching tax system overhaul includes streamlining efforts aimed at individuals. The changes will simplify and largely automate end-of-year tax obligations for PTS (Personal Tax Summary) and IR3 filers.

End-of-year tax assessments

Individuals will no longer be "filing" their taxable earnings information; rather, they will be checking the pre-populated account Inland Revenue hold for them to ensure it is accurate and complete.

For PTS earners who only earn "reportable income" (ie income from sources IRD receives information from directly, eg employers and financial institutions), this means a tax assessment arises at the earlier of either:

  • The individual confirming with Inland Revenue the pre-populated account is complete; or
  • The Commissioner of Inland Revenue notifying the individual she is satisfied the account is complete.

Refunds are then automatically paid out, preferably by Direct Credit (as a faster and more secure method for issuing tax credits).

For many individuals, the new process would greatly minimise the amount of interaction required with Inland Revenue.

Individuals who also have other income or deductions which are not reportable income should submit this information to Inland Revenue. Their pre-populated account would then be updated to become an "adjusted account". This includes individuals who hold investment portfolios and/or overseas investments.

Anyone who has very little reportable income must supply all their earnings information, much like the current IR3 process.

Claiming donations tax credits

Tax payers who exclusively have reportable income may only need to update their pre-populated account if they have made donations which are eligible for tax credits.

Accordingly the process for claiming donations tax credits will also be simplified, by adding new options for submitting claims:

  • Upload donation receipts throughout the year to myIR. By doing this, the year-end refund can be issued without the need to submit a tax credit form
  • Complete the donations section at the same time as submitting other tax information when updating the pre-populated account
  • Complete a separate online return via myIR (if all other income information has already been provided)

Individuals can also continue submitting a paper form, which is the current process.

The additional options will come into effect on 1 April 2019, for the 2018/19 financial year.

Other Inland Revenue changes coming on 1 April 2019

  • Additional KiwiSaver employee contribution rates will become available
  • Payday filing becomes mandatory

Read our blog post from 20 February 2019 for more details on these.

Inland Revenue key services unavailable

To implement the upcoming changes in Inland Revenue's systems, their key services will be unavailable between 3pm on Thursday 18 April until 8am, Friday 26 April 2019.

During this time Inland Revenue's myIR secure online service will not be available, and their contact centers and offices will be closed.