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For businesses and employers
Ngā pakihi me ngā kaiwhakawhiwhi mahi

Your obligations with income tax when you cease trading

This page has information for:

  • anyone who is ceasing to operate a business, for any reason
  • companies that are no longer trading
  • limited partnerships that are no longer trading.

Getting it right - closing down your business

There is a lot to think about when closing down a business. It's easy to overlook some of your tax obligations at this time, so we have created a new video to explain how to get it right.

This video shows how easy it is for a business owner, Scott, to take care of his tax when he closes his business. It also explains what to do if your business is registered with the Companies Office.

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Flash video | 2:16 mins

View transcript ›

Filing a final tax return

After you've ceased operating a business, you must file a final tax return that includes your business accounts up to the date your business ceased to operate.

Note  
You can't file this tax return early. It's due at the same time as your previous income tax returns, after the end of the financial year in which your business ceased to operate.

Until you've filed your final tax return, you haven't completed your business tax obligations.

Retaining records

After you stop operating your business, you must keep your business records for seven years from the end of the income year to which they relate.

When a company or limited partnership is no longer trading

If you're winding up your company or limited partnership (LP)

You'll need to:

  • file all returns required and pay all tax owed.
  • apply for a letter from us confirming we have no objections to the company being removed. You'll need to tell us:
    • the date at which the company or LP intends to wind up
    • the reason for winding up
    • what year the final returns will be for and when they'll be filed, if not already filed
    • whether the company or LP still has any assets and what will happen to them
    • whether any assets have been distributed to shareholders or directors (general partners or limited partners for LPs) or any other person/entity for less than market value (including debt forgiveness) and if so, provide the relevant details
    • a copy of the profit and loss account and the balance sheet up to date of winding up
    • if there are any outstanding returns or debts with us, and what is being done about these
    • the contact person/director/agent for any future matters
    • any other relevant information - then send the letter to:

      Inland Revenue
      Box 39010
      Wellington Mail Centre
      Lower Hutt 5045

Refer to the Companies Office website to find out how to get your company removed from the register.

Refer to the Limited Partnerships website to find out how to get your LP removed from the register.

If your company is stopping its taxable activities but not winding up altogether

You'll need to apply to us for non-active status with a Non-active company declaration (IR433). If your application is accepted, you're no longer required to file tax returns until your company is reactivated.

If your limited partnership is stopping its taxable activities but not winding up altogether

You'll need to continue filing income tax returns, even if they are nil returns.