The main objective of taxation is to raise revenue to fund the Government’s expenditure. This should be done in a way that is considered to be fair. Tax is, however, costly to impose. There are direct costs associated with administration and compliance, but also costs associated with distortions in people’s behaviour.

Not everyone in New Zealand needs to put in a personal tax return, but it is up to you to find out if you need to. If you have overseas income or arrived partway through a tax year, you are required to file a return.  The tax year runs from 1 April to 31 March. There are other circumstances under which you must file a return.

Key features of New Zealand’s tax system include:

• no inheritance tax

• no local or state taxes apart from property rates levied by local councils and authorities

• no payroll tax

• no social security tax

• no healthcare tax, apart from a very low levy for New Zealand’s ‘accident compensation injury insurance scheme

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• Grow your Business

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.