Taxation

We offer a full range of Taxation Services

• Our proactive approach ensures we deliver a consistent service and build solid relationships which stand the test of time.
  
  Taxation can be a major cost to your business. We will work in partnership with you to minimise your tax and help you achieve your key objectives. We subscribe to an extensive taxation resource including CCH question / answer service and ensure the team is well trained on taxation issues. We also have access to the services of a national tax consultancy firm to refer difficult taxation queries.
  
  We provide a complete service of help and advise in all of the following areas:
  • Preparation of personal and company tax returns
  • GST/FBT/ACC obligations
  • Implementation of tax effective trust structures for asset protection and tax minimisation
  • Management of any IRD Audits or disputes

Contact us for more information.

Income Tax Rates and other Tax Rates from 1 October 2010

Income Tax
The income tax rates for individuals from 1 October 2010 are summarised in the following table: 

Because the new rates start halfway through the tax year, there will be composite annual tax rates that will apply only for the first year.  Those are also shown in the table.

The transition provisions to the new PAYE rates provide:

• for pay periods of less than 1 month that span 1 October 2010, the new PAYE rates apply for the whole period;
• for pay periods of more than 1 month that span 1 October 2010, the old PAYE rates apply for the period to 1 October and the new rates for the period after 1 October 2010;
• payments made after 1 October for pay periods prior to 1 October are at the rate for that pay period.

PAYE rates from 1 October 2010:  Secondary employment income

Provisional Tax
The formulas used to calculate provisional tax will change and allow individuals that pay provisional tax based on the uplift method to reduce their provisional tax payments from 1 October 2010.

The following table provides the adjustment factor for individuals on the uplift method and the GST ratio method for calculating provisional tax for the 2010-11 or later income years.

Portfolio investment entity (PIE) rates
The tax rates that apply to investors in portfolio investment entities (PIEs) reduce as follows:

New FBT rates
The new Fringe Benefit Tax (FBT) rates and thresholds for attributed fringe benefits change as follows to reflect the new personal tax rates.

Composite FBT rates for the 2010-11 income year

FBT rates for the 2011-12 income year 

Employers will still have the option of paying FBT at a single rate and that rate will reduce from 61% to 49.25%.

For close companies and small businesses that are able to file FBT returns annually, the applicable rate will reduce to 49.25% from the 2011-12 income year, and there will be a composite rate of 55.04% for the 2010-11 year.

New Employer Superannuation Contribution Tax Rates  
The table below summarises the new employer superannuation contribution tax (ESCT) rates.

The changes will apply from the first pay period that ends on or after 1 October 2010.  The new rates will be:

It should be noted that the income ranges at which the ESCT rates apply are higher than the income ranges that apply for personal tax rates.  This is to reduce the risk that employer contributions made to employees whose income is close to a threshold are not overtaxed.

Withholding tax rates

There are consequential changes to some withholding tax rates.

The RWT rate on interest prior to 1 October 2010 will automatically change to the new rate equivalent (e.g. 38% will move to 33%). The default rate will change to 17.5% for those that have not provided a payment election rate and have RWT withheld at 19.5% prior to 1 April 2010. The default rate for new accounts opened after 31 March 2010 will be 33% for those that do not elect a rate.

The withholding tax rates for casual agricultural employees and election day workers will reduce from 21% to 17.5%, to reflect the second-to-lowest marginal tax rate.

There is no change to the withholding tax rate that applies to Mâori authorities and horticultural workers.
 

New Tax Rates for Companies and Savings

The Act provides for the following change to the tax rules for business and investments:

• The company tax rate will reduce from 30% to 28% from 1 April 2011.

Provisional Tax

The formula used to calculate company provisional tax will change and allow companies to reduce provisional tax payments for the 2012 year.

For the 2011–12, 2012–13 and 2013–14 income years, the relevant income tax amount is to be multiplied by 0.95 as set out in the following table:

 Contact us for more information.