Economic rates apply to the purchase of assets.

There is an option to use either straight line or equivalent diminishing value (DV) for all assets.

Assets can be divided into two groups:

• Low value assets of $500 or less can be claimed as an income tax deduction (subject to normal deductibility criteria) in the year they are acquired.

• Assets of $500 or more must be depreciated over time using Inland Revenue's specified rates. A sample of these are:

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For individuals, a rebate of 33.33% for voluntary school fees and qualifying donations of $5.00 or more may be claimed.

For companies, instead of a rebate, qualifying donations are treated as expenses with no GST, limited to the company's net income for the year.

Some important points to note:

• If you are getting something in return, it is not a donation. This includes raffles.
• Some donation receipts are part donation, part something else - you can only include the donation portion in your calculation.
• You must retain your donation receipts in order to claim for them.
• Not all charitable organisations are eligible for donation rebates; refer to the Charities Services Register if in doubt.

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Entertainment expenditure is limited to a 50% deduction if it falls within the following:

• Corporate boxes
• Holiday accommodation
• Pleasure craft
• Food and beverages consumed at any of the above, or in other specific circumstances (eg business lunches, social functions)
• Friday drinks for staff

There are a number of exemptions from these rules allowing a full deduction, such as entertainment outside New Zealand, promotions to the public, samples, morning and afternoon teas, food and beverages consumed while travelling in the course of business (exceptions apply).

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Any benefit provided to employees (including shareholder employees) not taxed as wages is usually subject to FBT if over specified thresholds.

The general FBT rate reduced to 49.25% from 1 October 2010 of the value of benefits provided but lower rates may apply in certain circumstances.

Returns are filed quarterly unless the tax payer is eligible to make an election to file on an income year or annual basis.

FBT value of motor vehicles: 5% per quarter of the original cost (including GST) or, in certain circumstances, 9% of the book value.

Low or interest-free loans: the interest rate applicable for FBT purposes is:

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Exemptions:

• Financial services
• Domestic rentals
• Wages
• Salaries

Threshold for registration is $60,000 turnover per annum.

If turnover exceeds $500,000 you cannot file six-monthly periods.

If turnover exceeds $2,000,000 you must use invoice basis.

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GST - 1 or 2 monthly returns or not GST registered:

GST - 6 monthly returns:

Note: the above terminal tax dates assume the tax payer is linked to a tax agent.

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A standard penalty applies to income tax returns that are filed late. Penalties and use of money interest apply to all taxes paid late. The initial late payment penalty is 1% for the first week, increasing to 5% after 1 week, with a 1% monthly incremental penalty thereafter.

Use of money interest: the rate applying from 8 May 2016 is 8.27%.

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Employee contribution options are 3%, 4% or 8%.

Compulsory employer contribution of 3% of employee's gross salary or wage.

Government pays an annual member tax credit capped to a maximum of $521.43 per annum.

The Government contributes a $1,000 tax-free kick-start payment to members who joined the scheme before 21 May 2015. If you joined after this date you are not eligible for the payment.

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The minimum wage rates applicable from 1 April 2017 are:

Refer to Employment NZ's website for definitions of the three rates.

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Deductions from 1st to 15th of the month are due on the 20th of the same month.

Deductions from 16th to the last day of the month are due on the 5th of the following month.

Relief: if the total PAYE deductions are less than $500,000 for the previous year, PAYE payments will be due monthly on the 20th of the following month.

Employee ACC earner premiums, student loan repayments and child support deductions are payable in the same manner.

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Resident individuals:

Taxable income more than $48,000 - if your taxable income was more than $48,000 in both of the previous two income years, your PIR is 28%.

Note: if for the two previous income years you qualify for two rates, your PIR is the lower rate.

Other investors:

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Provisional tax is generally payable in three instalments and is calculated based on the previous year's residual income tax (RIT).

For companies and trusts, use of money interest is payable on the shortfall of terminal tax from the 1st instalment date until the tax is paid.

For individuals, use of money interest is payable from the 1st instalment where the RIT is greater than $50,000 or provisional tax has been estimated.

* From 1 April 2017 safe harbour thresholds increase to $60,000.00 for all tax payers.

The changes mean only tax payers with an RIT of $60,000.00 or higher will attract use of money interest charges. In this case, interest will be charged on any under or short payments of the provisional instalments due, and on the shortfall of terminal tax from the 3rd instalment date until the tax is paid.

If your RIT is less than $60,000.00 and you use the standard method of calculating your provisional amount, you won't be charged use of money interest as long as you make your provisional tax payments on time.

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Resident withholding tax (RWT) on payments of interest and dividends for individuals is as follows:

The default rate for individuals when no IRD number is supplied is 33%.

Provided a company supplies their IRD number, their RWT rate will be 28%. If no IRD number is supplied RWT is deducted at the rate of 33%.

The trust RWT rate is 33%.

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Standard balance date tax payers linked to a tax agent have until 31 March the following year to file their income tax returns under the extension of time arrangements.

Tax payers failing to file returns by the due date may lose their extension of time, resulting in earlier return and terminal tax payment dates for subsequent income years.

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Repayment of student loans begins once a student's assessable income exceeds the specified repayment threshold.

These thresholds are:

The repayment amount is 12% for each dollar above the threshold.

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If your family income before tax is less than the amounts shown in the table, you may qualify for payment.

The below income limits are based on the eldest child being aged 15 or under, and all other children being 12 years or under.

The parental tax credit (PTC) is a payment for up to 10 weeks after a new baby arrives. Depending on your family income you could receive up to $2,200.

Minimum family tax credit (MFTC) tops up a family's after-tax income to $23,816 a year.

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