Each person has a different lifestyle. To maintain a good lifestyle lot of financial planners, go with $100k a year for a couple, means $50k for one person. However, this has been a very traditional approach this approach is suited for industrial age era not for modern time (information age)

Traditional approach is you work till 65, keep making small savings in your retirement funds. By the time you retire you should have about $500k in your investments. These investments will give you a yield of about 5%, so you will get about $25k a year. You will also be eligible for Super, may be one investment property so roughly you will get about $50k a year.

What is RWT (resident withholding tax)

It is a tax deducted on dividend before making a payment to the shareholder. For example, if company made a profit of $100 before tax, $28 would be income tax. Net profit after tax $72 will be a liability payable to shareholders. A payment of $72 will be made to the shareholders, the name of this payment is dividend.  The IRD is interested in collecting tax from this payment, with current highest tax rate being 33%, further 5% of deduction is imposed on the company. Hence, $5 will be deducted and paid to the IRD, this is called RWT.

What are the new rules of RWT on Dividend payments for closely held small companies.

The changes on Dividend and RWT are outlined in Taxation (Annual Rates for 2016-17, Closely Held Companies, and Remedial Matters) Bill.

The bill received royal assent on 30-03-2017. This Act came in to force on the same date, and in practice from 01-04-2017 income year.

Exemption of RWT deduction on Dividend Payment between companies

1.Utilise technologies:

Modern techs can save your time and give you edge over other competitors. Use of Facebook, LinkedIn, Google+ will be easy to reach large number of people. Dropbox or Google Drive can save your data in cloud so you don’t have to worry about losing your important data when PC crashes.

In November 2015, the Government released the fourth document in a series of discussion documents for public consultation planned for the next few years to support consultation on the Government’s proposals for modernising and simplifying tax and social policy administration in New Zealand.

You might think “I am in a small business, why I need a cash flow?” But small businesses are the most that require cash flow.

Many analysts stated that the main reason for small businesses not growing is because of poor cash management.

If you are a New Zealand resident for tax purposes, you will be taxed in New Zealand for all of your “worldwide income”. This includes income derived from New Zealand and from other countries.

“Cash is a king” you might have heard this many times. However, I must say the “Cash is Super King”.

Better managed cash flow is a very important financial tool that can change your business and push it to move forward. In simple terms, cash flow is money coming in to the business and money going out of the business.

What you need to know?

The Holiday act 2003 was enacted on 17-12-2003, it covers leave and holiday entitlements of an employee in his/her employment. 

What is the Future of Accounting & Role of an Accountant?

Accounting is completely dependent on technology these days. Technology plays a vital role in today’s changing business environment. And there is no doubt accounting has been part of this. Over the past few years, there have been significant changes in accounting world. Yes, accounting wasn’t easier earlier than what we are doing these days with just one click.

In the article Making Tax Simpler “Better Administration of PAYE and GST”, the Government have introduced new proposals to improve the tax systems in New Zealand. Such changes relates to PAYE and GST.

The most significant improvement they want to make is to “use modern digital technology to provide faster, more accurate and convenient interactions with Inland Revenue”. This means that they want to integrate PAYE and GST filling process into accounting software.

Online GST changes and its impact on taxpayers.

According to the Revenue Minister, Todd McClay, the Government is looking at a way to charge GST on cross-border services, intangibles and goods with the focus on collecting GST from overseas suppliers of online products such as e-books, music and videos and GST on low-value imported goods. At present, there is no GST charged on overseas online- service provider and low-value of imported goods.

The purpose of this tax is to create a fairer competition for domestic suppliers and increase revenue for the government. Globalisation means the big world becomes smaller, as you can do business, buy and sell anything with people around the world. The number of New Zealanders buy goods and services from overseas have increased substantially over the last few years. Mr McClay claims that the GST foregone on overseas purchased is around $180 million a year and it is growing at around 10 percent each year. Moreover, the new rule is also fairness. Currently, overseas supplier is benefiting as there is no GST charged on their goods and services, so they can charge a lower price compared with New Zealand suppliers who have to include GST in the sale price.

From 1 October 2015, the Parliament introduced some changes to the property rules called as Bright-line test. The purpose of the test is to reduce the number of foreign speculators on NZ property and thus maintain positive housing prices of big cities in New Zealand. This rule only applies to residential properties bought on or after 1 October 2015. The idea behind the test is that taxpayer has to pay tax on the gain when you selling your property (with some exceptions). By taxing on the gain, it somewhat discourages speculators for housings as the profit is not as good as before.

Residential care subsidy:

What is it?

Residential care subsidy is a programme to help people aged 50 and over who need long-term residential care in a rest home or hospital to afford for the cost of care. You may be able to get the Residential Care subsidy if you:

IRD has recently launched an audit campaign on traders of Trademe. Together with Trademe, they are seeking and exchanging information of trademe traders who are ignoring their tax obligations. The most common problem we have seen is that traders started as a hobby, but with regular pattern of selling this was transformed into a business. 

Budget 2015 bring new property tax rules

The Government will give extra $29million to the IRD in Budget 2015 for the property tax compliance activities. This is mainly to ensure property speculators also pay their fair share of tax, which is currently by enlarge being avoided.

With the purpose of improving the current tax system, the Government has introduced some proposed changes to modernise New Zealand’s tax administration. These changes will make a huge impact on business, individuals and social policy customers in New Zealand.

A tax audit is an examination of your financial affairs to check you have paid the correct amount of tax and you are complying with the tax laws. It could be a small check of GST or a full audit check on your business.  IRD may choose random business to start the audit and in the audit, there are some certain rights of a taxpayer.

The National Party planned to introduce a stable tax system, without making drastic changes to the minimum wage. The level of minimum wage impacts the level of unemploymen in the economy. National considers a number of issues non-negotiable. Among them are (a) No Capital Gain Tax (b) No change in GST (c) Reduction in Company Tax Rate in the long run.Loss-making start-up companies are supported by new tax rules that help them to cash out all or part of their tax losses from R&D expenditure. Inland Revenue Department (IRD) has larger outlay to target property speculators and others avoiding tax, making the system become fairer for everyone.

Office 365 is cloud-based office software developed by Microsoft. It is the same Office you already use every day, but powered by cloud.‘Cloud’ means the data is stored in remote storage centre and you can access to your files from anywhere with internet connection. Also, your software setting will be the same in every device.