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Business income tax
Te take whiwhinga pakihi
In running a business you need to account for income tax on your profits and the expenses/deductions you may claim against your income. During the tax year you must generally pay provisional tax, which is a series of instalments of income tax for this tax year. You pay income tax on your net profit for the year. To work out your net profit, deduct your business expenses from your income for the year.
The Tool for business

The Tool for business helps you get all your small business tax issues sorted quickly and simply.

Filing returns

If you're in business, you'll need to complete and send us an income tax return, and attach either a copy of your financial records or a form that summarises your income and expenses. Learn here the type of income tax returns you can use depending on the type of business you have.

Claiming business expenses

Most businesses incur expenses when generating income and most of these can be deducted from its income to arrive at its net profit or taxable income. It is on this amount that you pay income tax. Certain business expenses that are paid for out of business income cannot be claimed as allowable business expenses.

Watch our short video on claiming business expenses

Depreciation

Depreciation allows for the wear and tear on a fixed asset and must be deducted from your income. You must claim depreciation on fixed assets used in your business that have a useful lifespan of more than 12 months. Not all fixed assets can be depreciated. Land is a common example of a fixed asset that cannot be depreciated. Learn about methods of depreciation and the records you must keep.

Watch our short video on depreciation

Imputation

Imputation is a tax mechanism available to registered companies and certain other types of business.

Paying tax

If you are running a business, you will need to fill out a tax return each year and send it to us by the due date. When completing your tax return you will need to include income from all sources, and work out the tax on your total taxable income. Learn about which income tax rate applies to your type of business, when income tax returns should be sent in and what income tax returns to use.

What to do if your business is making losses

If the total deductible expenses for your business are greater than its income then it will have a loss for tax purposes. The business will not have to pay tax and the loss can generally be used to reduce income in future income years. The rules for using losses depend on whether the business is run through a company, trust or as a sole trader.

Income equalisation scheme

The income equalisation scheme allows farmers, fishers and foresters who are eligible taxpayers to even out fluctuations in income by spreading their gross income from year to year.

Information about relief in the event of extreme weather

Find out about tax relief and income assistance if you are affected by extreme weather. People who are currently entitled to these provisions are those affected by drought in the Central and East Coast Districts of the North Island and North Canterbury.

Overseas currency - conversion to NZ dollars

We publish different exchange rates for different purposes. This page will explain what they are and which one to use.

Business income tax basics

Learn the basics of business income tax plus including what a business pays income tax on and additional information on income tax during the first year of business including the early payment discount available for the first year of paying provisional tax.

Glossary of business income tax terms

Glossary of the terms used in business income tax publications including: Balance date; Capital expenditure; Depreciation; and more.

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Did you know?

From May 2008 people applying for new IRD numbers will receive a 9-digit number. If you employ people and deduct PAYE from their wages/salary or charge GST, you need to ensure your systems can accommodate both 8 and 9-digit numbers. 

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Date published: 14 Oct 2004

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