How the debt builds
Tax types, penalties and due dates
GST, PAYE, provisional and terminal tax, penalties and use-of-money interest, in plain English.
How New Zealand tax debt builds, tax type by tax type.
GST, PAYE and income tax each have their own due dates, penalty rules and risks. PAYE carries the steepest penalties and the most personal risk for directors. GST is the most common debt. Provisional and terminal tax catch out growing businesses, especially in their second year.
Use-of-money interest is charged daily on unpaid tax and continues during an instalment arrangement. We never print the current rate because it changes; IRD publishes it.
8 pages in this section
Tax debt in NZ explained
What tax debt means in NZ, how much businesses owe IRD, how penalties and interest make it grow, and the first steps to take if your business is behind.
Read more →GST debt
Behind on GST? Why GST arrears build, the NZ due dates and penalties, what IRD does next, and how an arrangement or a loan can clear the backlog.
Read more →PAYE arrears
Behind on PAYE? Why IRD treats unpaid employer deductions so seriously, the repeating 10% penalties, director prosecution risk, due dates and how to clear it.
Read more →Provisional tax
Provisional tax explained for NZ businesses: the $5,000 threshold, the standard, estimation, ratio and AIM methods, the key dates, and how to plan for them.
Read more →Terminal tax
When is terminal tax due in NZ? 7 February, or 7 April with a tax agent. The difference between terminal and provisional tax, and what to do if you can't pay.
Read more →Use-of-money interest (UOMI)
How IRD's use-of-money interest (UOMI) works: charged daily, not compounding, deductible for business, and still running while you're on a payment plan.
Read more →Late payment penalties
How IRD late payment penalties work: 1% the day after, 4% on day seven, which taxes have monthly penalties, the steeper PAYE rules, and how to stop them.
Read more →Why do I owe IRD?
Surprised by an IRD balance? The common reasons businesses owe IRD, from provisional tax to GST timing and penalties, and how to read your myIR statement.
Read more →Clear the IRD debt. Keep the business.
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