Supporting New Zealanders to comply
Inland Revenue contributes to New Zealand’s economic and social wellbeing by collecting and distributing money.
We ensure that revenue is available to fund government programmes by having people meet their payment obligations of their own accord. We also ensure that people receive the payments they are entitled to, enabling them to participate in society.
- Making compliance easy
- Helping customers to comply
- Detecting non-compliance
- Using the full force of the law
Most people and businesses voluntarily comply with their tax and social policy obligations. They meet the requirements for registering, filing, reporting, claiming and paying.
We support people and businesses to meet their obligations by providing information, reminders, self-assessment tools and online services.
The increase in business activities arising from the rebuilding of Christchurch has prompted an increase in non-resident contractors. We are working with key agencies and industries to help non-residents understand their New Zealand tax obligations.
Our compliance model
Most people and businesses want to comply with their obligations, but they may need some help from time to time. We offer a range of services and practical support, including advisory services and account management for large businesses.
We now have community compliance officers, who provide a broad service to local communities by talking to customers, providing help and advice, spotting potential non-compliance and putting in place remedies to prevent it.
We have also been encouraging businesses with international trade and investment activities to use advance pricing agreements (APAs). During the past 12 months, we completed a record number of APAs. We have also updated our website with practical guidance to supplement the Organisation for Economic Co-operation and Development’s (OECD) Transfer Pricing Guidelines.
Inland Revenue makes sure the activities of the small proportion of people and businesses that are reluctant to comply do not go undetected for long. We are using increasingly sophisticated information and intelligence capabilities to identify and target unacceptable behaviour.
We use our compliance management environment to help identify the individuals and businesses whose tax affairs we want to review or investigate. We can access data from a wide range of New Zealand and international agencies and match it with the information we hold.
For example, a growing number of cases have been identified where charitable status is used as a tax-saving device. We now have an information exchange programme with the Charities Commission and work together to identify charities whose activities warrant further investigation. As at 1 July, the Charities Commission and its registration, education and monitoring functions are now part of the Department of Internal Affairs.
We will act firmly and draw on a range of assessment and recovery methods when taxpayers deliberately underpay their tax or claim false credits or entitlements. We impose late filing and shortfall penalties and will prosecute those who commit fraud or evade paying tax.
Recently, a builder was sentenced to two and a half years in jail after being found guilty of 23 charges of tax evasion. He was convicted of knowingly providing misleading information to Inland Revenue, failing to file GST and income tax returns, and failing to account for PAYE. This led to outstanding tax of about $517,000.
After registering a business, the builder had reported income but claimed subcontractor expenses against it, using invoices that contained invalid addresses, incorrect contact details and/or invalid IRD numbers. One subcontractor that Inland Revenue was able to trace, using the details on the invoices, denied issuing the invoices. A former employee of the builder admitted writing false invoices in the subcontractor’s name, on the builder’s instructions.
Date published: 22 Aug 2012