Plain language law

New Zealand law explained for everyone

Income Tax Act 2007

Core provisions - Calculating and satisfying income tax liabilities

BC 6: Income tax liability of filing taxpayer

You could also call this:

“How to calculate the income tax you owe if you file a tax return”

You are a filing taxpayer if you need to file a tax return. Your income tax liability is the amount of income tax you need to pay for a tax year. To figure out your income tax liability, you multiply your taxable income by the basic tax rate.

If you have schedular income, which is a special type of income, your income tax liability is worked out differently. You can find out how it’s calculated in [section BC 7].

Sometimes, when you do the calculation, you might get zero or a negative number. If this happens, you don’t have to pay any income tax for that tax year. Your income tax liability is zero.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1512347.

Topics:
Money and consumer rights > Taxes
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BC 5: Taxable income, or

“How to calculate your taxable income by subtracting tax losses from your net income”

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BC 7: Income tax liability of person with schedular income, or

“How tax is calculated when you have income from specific sources”

Part B Core provisions
Calculating and satisfying income tax liabilities

BC 6Income tax liability of filing taxpayer

  1. The income tax liability of a filing taxpayer for a tax year is the amount calculated by multiplying their taxable income for the tax year by the basic tax rate. The income tax liability of a filing taxpayer with schedular income is determined under section BC 7.

  2. If the income tax liability calculated under subsection (1) is zero or negative, the filing taxpayer's income tax liability for the tax year is zero.

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