Compliance focus 2009-10: 2009-10 compliance snapshots
2009-10 compliance snapshots
A compliant business or person:
- registers when they are supposed to
- reports or provides complete and accurate information
- files returns or other information required on time
- claims and receives only what they are entitled to
- pays correct amounts on time.
We recognise the majority of businesses and people meet these requirements voluntarily.
Our research often identifies patterns of behaviour that attract our attention. This document highlights those areas of concern and sets out the appropriate action we will take in response. It also outlines our activities to make it easier for businesses and people to do the right thing.
Managing tax in the current economic environment
In the current economic environment many people and businesses are facing financial pressures, or worry they will be in the future. This is likely to have an impact on their ability to comply.
Our priorities are:
- intervening earlier when businesses have difficulty meeting their tax obligations
- using our discretion and flexibility to assist people and businesses in debt
- identifying emerging hidden economy and fraudulent activity earlier and acting quickly
- identifying behaviours or activities that indicate tax credit or tax refund fraud, such as ineligible and fraudulent claims
- identifying misuse of charities' tax-exempt status
- following up significant tax losses to ensure they are not exaggerated or artificially generated to get tax benefits.
Encouraging accurate filing and reporting
Accurate filing and reporting establishes an individual's or a business's tax liability. Filing late or failing to file impacts on our ability to collect taxes and establish entitlement to social support.
Our priorities are:
- increasing the number of employers who e-file their employer monthly schedules and pay using ir-File
- focusing on the systematic under-reporting of income tax on profits made from selling property and online trading
- monitoring targets for tax agents' extension of time for filing clients' income tax returns
- making the end-of-year process for individuals easy to get right by improving the accurate use of tax codes, and increasing understanding of who needs to complete an Individual income tax return (IR3).
Promoting sound tax practices
We monitor tax practices to ensure acceptable tax planning does not cross over to tax avoidance.
Our priorities are:
- fostering cooperative relationships, particularly with large enterprises
- identifying and responding to significant transactions, trends, deductions and schemes
- analysing the role of intermediaries in aggressive tax planning schemes
- supporting tax agents to be alert to areas of avoidance, fraud and evasion so they can provide quality advice to their clients
- providing more certainty for businesses in applying tax law, mergers and acquisitions, specific tax industry issues and monitoring complex financing arrangements.
Ensuring people receive their correct entitlements
We administer a number of social support programmes.
Our priorities are:
- ensuring families receive their correct entitlements, while keeping focused on detecting incorrect payments as a result of deliberate fraud or avoidance activities
- developing new ways parents can pay their child support payments, and collecting child support from parents who have moved overseas using multi-lateral, reciprocal and data-matching agreements
- clearly setting out employers' KiwiSaver responsibilities and working with scheme providers
- raising awareness about eligibility for tax credits
In line with our approach to managing compliance, we have provided practical support and guidance to help people and businesses get it right, as well as outlining the risks of detection and the consequences of non-compliance.
We know the world keeps moving. New Zealand is a small, open economy, susceptible to global trends, rapid changes in business priorities, new technological developments and demographic shifts. So, we must address any new compliance issues that emerge during the year and change our priorities and vary our plans in response.
In the following diagram the compliance issues set out in our work programme are shown according to their impact on revenue and integrity of the tax and social support systems we administer. Details about each compliance issue are shown in the corresponding segment shown in brackets.
The segments include:
- small and medium enterprises
- high wealth individuals
- large enterprises
- non-profit groups
- employers
- tax agents
- individuals
- families.
Increasing level of impact on revenue and integrity of the tax and social support system
Other sections in the Compliance focus 2009-10
| Commissioner's foreword | Compliance snapshots | Introduction | Community and business |
Date published: 09 Jun 2009
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