All text must be copied without modification and all pages must be included.
This document must not be distributed for profit.
McLEAN AND CO.
Schedular Payments (formerly Withholding Payments)
If you sell goods through online auction or sales sites, for example TradeMe or eBay, your tax obligations are exactly the same as for buying and selling goods in a shop.
Many people sell things they no longer want or need. Usually, there are no tax consequences. However, people who sell things on a regular basis may be regarded as being in business and should be declaring the sales for income tax purposes.
As a general guide, you are regarded as being in business and should be declaring sales from online (or any other) trading, if:
A key factor that IRD Regulations would consider when deciding whether someone is in business is the frequency or regularity of their trading.
As well as income tax, businesses with online sales of over $60,000 a year are required to register for GST.
Like any other business, sufficient records must be kept for seven years to substantiate your income and expenses.
SCHEDULAR PAYMENTS (FORMERLY WITHHOLDING PAYMENTS)
Schedular payments are made to contractors who perform activities outlined in Schedule 4 of the Income Tax Act 2007. These payments are subject to tax at a flat rate even if the contractor is registered for GST. Find a list of the Schedule 4 activities on the back of the IR330 Form issued by IRD. These rates are listed below.
Those affected by tax on schedular payments are:
These contractors must use a "WT" tax code. However, they may be eligible for a certificate of exemption or a special tax rate. Find out how to apply for a certificate of exemption.
To find the rate of tax to deduct from schedular payments use this table.
|If the activity is.....||the normal tax rate is...||the rate if no tax code is declared is...|
|ACC personal service rehabilitation payments for agencies||12.5c||30c|
|Agricultural contracts for maintenance, development or other work on farming or agricultural land||15c||30c|
|Agricultural, horticultural or viticultural contracts by any type (individual, partnership, trust or company) of contractor for work or services rendered under contract or arrangement for the supply of labour, or mainly for the supply of labour on land in connection with fruit crops, orchards, vegetables or vineyards||15c||30c|
|Apprentice jockeys or drivers||15c||30c|
|Cleaning office, business, institution or other premises (except residential) or cleaning or laundering plant, vehicles, furniture etc||20c||35c|
|Commissions to insurance agents and sub-agents, and salespeople||20c||35c|
|Company directors' fees||33c||48c|
|Contracts wholly or substantially for labour only in the building industry||20c||35c|
|Demonstrating goods or appliances||25c||40c|
|Entertainers (New Zealand resident only) such as lecturers, presenters, participants in sporting events, and radio, television, stage and film performers||20c||35c|
|Examiners (fees payable)||33c||48c|
|Forestry or bush work of all kinds, planting, sowing or gathering vegetables, or flax planting or cutting||15c||30c|
|Freelance contributions to newspapers, journals etc (articles, photographs, cartoons etc) or for radio, television or stage productions||25c||40c|
|Gardening, grass or hedge cutting, or weed or vermin destruction (for an office, business or institution)||20c||35c|
|Honoraria (including payments to mayors, chairmen and members of council, boards of trustees, boards, committees and official clubs or societies)||33c||48c|
|Mail contracting, transport of school children, milk delivery or refuse removal||15c||30c|
|Jockeys' or drivers' riding or driving fees paid to New Zealand residents||20c||35c|
|- work in respect of construction, installation, assembly and similar projects||15c||30c|
|- professional or technical services in respect of such projects||15c||30c|
|- hire of equipment or personnel (other than as employees)||15c||30c|
|Non-resident entertainers and professional sports people visiting New Zealand||20c||n/a|
|- caretaking or acting as a watchman||15c||30c|
|- mail contracting||15c||30c|
|- milk delivery||15c||30c|
|- refuse removal, street or road cleaning||15c||30c|
|- transport of school children||15c||30c|
|Proceeds from sales of:|
|- eels (not retail sales)||25c||40c|
|- greenstone (not retail sales)||25c||40c|
|- sphagnum moss (not retail sales)||25c||40c|
|- whitebait (not retail sales)||25c||40c|
|- wild deer, pigs or goats or parts of these animals||25c||40c|
|Sharefishing (on contract for the supply of labour only)||20c||35c|
|Shearing or droving||15c||30c|
|Street or road cleaning||15c||30c|
|Television, video or film - on-set and off-set production processes (New Zealand residents only)||20c||35c|
IRD provide a service for the true owners of unclaimed money which
has been left untouched for six or more years in companies such as
financial institutions and insurance companies.
This list was updated in October 2009. To access it go to
Unclaimed money is not income tax refunds or any other unpaid tax refunds.
If you believe you are entitled to unclaimed money send IRD
your name, address, IRD number and proof of identity (for example a copy
of a birth certificate, driver's licence or passport) by email to: firstname.lastname@example.org
or by mail to:
PO Box 38222
Wellington Mail Centre 5045
Hoax emails have been circulating that claim to be from IRD asking you to send your personal details and IRD number.
IRD advise that they never ask you to forward any personal information by email, and you should always be very careful about giving out your personal details or IRD number.
Don't click on any links within a suspicious email or reply to it. You should delete it immediately from your inbox.
If you think you've given out your personal details or IRD number to a possible hoax email contact IRD on 0800 227 774.
|McLEAN AND CO KNOWLEDGE CENTRE AND ARTICLES ABOUT TAXATION AND BUSINESS IN GENERAL PRESS HERE||FOR BUSINESS STARTUP KNOWLEDGE CENTRE PRESS HERE|
|FOR INFORMATION ABOUT COMPANY INCORPORATION PRESS HERE||FOR PREVIOUS MONTH EMAIL NEWSLETTERS PRESS HERE|
If we can assist further, please email McLean and Co as follows: