Changes to Provisional Tax and Interest

| Categories: New Zealand

The New Zealand government has announced some tweaks to the tax system to assist businesses. It’s not a benefit or cash bonus, but could reduce your tax bill for the 2021 tax year.

Here’s the outline from the video:

  • Increased Provisional tax threshold
    • Normally pay Provisional Tax if your total tax bill is over $2500
    • This will increase to $5000 for the 2020-21 tax year
    • Simply a cash flow delay – pay later than normal
    • Won’t change any Provisional tax due on 7 May 2020
  • IRD write off interest on some late payments
    • Income tax terminal and provisional, GST and PAYE
    • Due on or after 14/2/20
    • Doesn’t change the tax owing
    • Must prove inability to pay as a result of COVID-19
    • No mention of waiving late payment penalties
    • Application required (details not yet provided)

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