ONLINE TRADING

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:

• you acquired the goods with the purpose of on-selling

• the purpose of the activity is to make a profit, or

• your business involves dealing in these goods.

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)

WHAT SCHEDULAR PAYMENTS ARE?

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. 

 

WHO IS AFFECTED BY TAX ON SCHEDULAR PAYMENTS?

Those affected by tax on schedular payments are:

• self-employed contractors, and
• companies operating in the horticultural and viticultural industries.

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
Modelling	20c	35c
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
Non-resident contractors:
- 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
Payments for:
- 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

 

UNCLAIMED MONEY

 

WARNING OVER HOAX EMAIL

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.