Plain language law

New Zealand law explained for everyone

Income Tax Act 2007

General collection rules - Provisional tax - Table R1: Summary of instalment dates and calculation methods for provisional tax

RC 40: Some definitions

You could also call this:

“This section explains what early-payment discounts and small-business persons are”

In this part of the law, you’ll learn about two important terms: early-payment discount and small-business person.

An early-payment discount is a reduction in income tax that you can get under sections RC 38 and RC 39 of the law.

A small-business person is someone who runs their own business. They might work alone, with partners, or as the owner of a look-through company. They don’t use a company or trust to run their business. Most of their income comes from their business, not from things like interest, dividends, royalties, rent, or beneficiary income.

This text is automatically generated. It might be out of date or be missing some parts. Find out more about how we do this.

View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1519926.

Topics:
Money and consumer rights > Taxes
Previous

RC 39: Credit treated as payment of income tax, or

“Early-payment discount for small businesses counts as income tax payment”

Next

RD 1: What this subpart does, or

“This subpart outlines employer obligations for PAYE, FBT, and ESCT/RSCT rules”

Part R General collection rules
Provisional tax: Table R1: Summary of instalment dates and calculation methods for provisional tax

RC 40Some definitions

  1. In this subpart,—

    early-payment discount means a discount of income tax under sections RC 38 and RC 39

      small-business person means a person who—

      1. conducts a business on their own account, acting alone or as a partner in a partnership or as the owner of a look-through company; and
        1. does not use a company or a trust in the conduct of the business; and
          1. derives income that is mainly from the business, and does not consist of interest, dividends, royalties, rent, or beneficiary income.

          Compare
          Notes
          • Section RC 40 small-business person paragraph (a): amended (with effect on 1 April 2019), on , by section 152(1) (and see section 152(2) for application) of the Taxation (Annual Rates for 2021–22, GST, and Remedial Matters) Act 2022 (2022 No 10).