IRD Advices About Provisional Change
March 10, 2009 New Zealand Taxation
The Inland Revenue Department (IRD) has issued a statement reminding people of their option of changing the way they pay Provisional Tax, and the impending deadline of the option.
The IRD is allowing people who opt in before the end of March to use the new “ratio option” to calculate their provisional tax liability. According to the IRD this option would be most beneficial to businesses with heavily fluctuating cash flows.
The new system will be calculated based on the most recent GST return filed by the business. Subsequently, the Provisional Tax will be calculated and payment will be made six times a year, as opposed to the current three. As such, any business which has fluctuations from one month to the next might see benefit from the new system, so as to pay a more appropriate amount for their level of monthly revenue.