Taxpayers who do not meet their tax obligations may face penalty or interest charges. To avoid such charges, you should pay the full amount of tax you owe by the due date.
The main kinds of charges for failing to meet tax obligations are:
The non-payment penalty is 10% of the overdue amount. If you still do not pay, another 10% penalty will be added each month an amount remains unpaid. When you pay the unpaid amount or enter into an instalment arrangement, the last 10% penalty given will reduce to 5%.
Solutions such as tax pooling can also be used to manage tax and limit exposure to penalties and use of money interest.
The IRD has discretion to remit interest and penalties where COVID-19 has affected income and a remittance request has been made.
For more information about managing tax, give us a call. For more information about tax penalties refer to the IRD's Penalties and interest guide.
74 Whitby Road
WAKEFIELD 7025
P. 03 541 9005
M. 021 221 1009
E. sonia@allaccounts.co.nz