* conditions apply, as always!
In certain circumstances, you can get a tax discount from the IRD. Here are the conditions.
- You're a sole trader or a partner in a partnership
- You've started a new business
- Most of your income comes from the business
About your current tax situation
- You didn't need to pay provisional tax in the current tax year, and haven't had to the past four years
- You haven't received the discount in the past four years
When and how to get the discount
- You need to make a voluntary tax payment before the end of the income year - there is no minimum requirement. For example - we're now in the 2022 tax year. Your voluntary payment must be made before 31 March 2022.
- Choose to receive the discount before the tax return is due for the income year. Using the 2022 year as an example, you would need to let the IRD know by 31 March 2023 if you have an Extension of Time (EOT). If you don't have the EOT, you have until 31 July 2022.
How do I know if I have EOT?
If you have a tax agent (such as Beany) and have been paying your tax on time with the IRD, you're likely to have the extension. It's more or less granted automatically when you're added to a tax agent's list - you won't have had to specifically apply for it.
However, if you haven't filed returns or paid tax on time, the IRD may withdraw your extension, even if you have a tax agent.
- 2022 is your first year and you meet the necessary requirements for the discount. Based on your income and expenses, you think tax will be around $15k.
- You decide to pay $11k on 30 March 2022 to take advantage of the discount. The discount would be $737.