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Tax Administration Act 1994

Schedule 8: Reporting of income information by individuals and treatment of certain amounts

You could also call this:

"Telling the government about your income and what happens with small tax debts"

Illustration for Tax Administration Act 1994

You need to report some income information to the government. This includes income from estates or trusts, foreign-sourced amounts, and income from partnerships. You also need to report income from look-through companies, rents, self-employment, and employee share schemes. You must tell the government about other income, like income from selling property. The government may write off small amounts of tax you owe, like $50 or less. The Commissioner can write off tax if it's not substantial and is due to a problem with the tax collection rules, as stated in section 22J.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=LMS198013.

Topics:
Money and consumer rights > Taxes
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Schedule 7: Disclosure rules, or

"Rules for Sharing Sensitive Tax Information"

8Reporting of income information by individuals and treatment of certain amounts Empowered by ss 22D, 22F, 22J, 22L

AReporting of income information by individuals

The following table is small in size and has 2 columns. Column 1 is headed Row. Column 2 is headed Items.
Table 1—Information on other income that must be reported
Row Items
1 Income from a New Zealand estate or trust
2 A foreign-sourced amount
3 Income from a partnership
4 Income from a look-through company
5 Income from rents
6 Income from self employment
7 A benefit under an employee share scheme in relation to an amount that is not reportable or exempt income
8 Other income, including income from a disposal of property that is not otherwise included in reportable income
 

The following table is small in size and has 2 columns. Column 1 is headed Row. Column 2 is headed Items.
Table 2—Additional information
Row Items
1 A deduction
2 A tax credit carried forward under section LE 3 of the Income Tax Act 2007
3 A tax loss balance, or tax loss component, other than a tax loss component under section LE 2 of the Income Tax Act 2007
4 A donations tax credit
5 An amount of income protection insurance
 

BTreatment of certain amounts

1Writing off certain amounts of tax payable

  1. Subject to clause 2, the Commissioner must write off the following amounts under section 22J:

  2. an amount of tax relating to income derived for a tax year by a qualifying individual that is equal to or less than $50:
    1. an amount of tax that—
      1. relates to reportable income derived for a tax year by an individual who uses a tailored tax code; and
        1. is derived solely from a payment of New Zealand superannuation or a veteran’s pension; and
          1. is equal to or less than $50:
          2. an amount of tax that, for a tax year in which an individual who uses a tailored tax code reaches the New Zealand superannuation qualification age,—
            1. relates to income derived from 1 or more of the amounts described in paragraph (b); and
              1. is equal to or less than $50:
              2. subject to paragraphs (ab) and (ac), an amount of tax relating to reportable income that is derived for a tax year by an individual solely from—
                1. a main benefit:
                  1. an education grant:
                    1. a payment of New Zealand superannuation:
                      1. a veteran’s pension:
                      2. an amount of tax relating to the income of an individual for a tax year that arises solely because the individual has an extra pay period in the corresponding income year, being—
                        1. 53 pay periods in the income year for a person paid weekly; or
                          1. 27 pay periods in the income year for a person paid fortnightly; or
                            1. 14 pay periods in the income year for a person paid in 4-weekly periods.

                            Notes
                            • Schedule 8 clause 1: replaced, on , by section 112 of the Taxation (Annual Rates for 2018–19, Modernising Tax Administration, and Remedial Matters) Act 2019 (2019 No 5).
                            • Schedule 8 clause 1(a): amended, on , by section 180(2) (and see section 180(6) for application) of the Taxation (Annual Rates for 2020–21, Feasibility Expenditure, and Remedial Matters) Act 2021 (2021 No 8).
                            • Schedule 8 clause 1(a): amended, on , by section 180(1) (and see section 180(5) for application) of the Taxation (Annual Rates for 2020–21, Feasibility Expenditure, and Remedial Matters) Act 2021 (2021 No 8).
                            • Schedule 8 clause 1(ab): inserted (with effect on 1 April 2020), on , by section 180(3) (and see section 180(6) for application) of the Taxation (Annual Rates for 2020–21, Feasibility Expenditure, and Remedial Matters) Act 2021 (2021 No 8).
                            • Schedule 8 clause 1(ac): inserted (with effect on 1 April 2020), on , by section 180(3) (and see section 180(6) for application) of the Taxation (Annual Rates for 2020–21, Feasibility Expenditure, and Remedial Matters) Act 2021 (2021 No 8).
                            • Schedule 8 clause 1(b): amended (with effect on 1 April 2019), on , by section 180(4) (and see section 180(6) for application) of the Taxation (Annual Rates for 2020–21, Feasibility Expenditure, and Remedial Matters) Act 2021 (2021 No 8).
                            • Schedule 8 clause 1(b)(i): replaced, on , by section 142 of the Taxation (Annual Rates for 2020–21, Feasibility Expenditure, and Remedial Matters) Act 2021 (2021 No 8).

                            2Exclusions

                            1. An amount of tax does not qualify for a write off under clause 1(b) and (c) if the amount is derived by an individual who has been assessed in the tax year as receiving an entitlement and a tax credit under the family scheme under subparts MA to MG and MZ of the Income Tax Act 2007.

                            2. An amount of tax does not qualify for a write off under clause 1(c) if, for the tax year and an amount of income referred to in subclause (3),—

                            3. the Commissioner has recommended for the individual, and the individual has consented to, a change of tax code under section 24DB or change of tax rate under section 26B giving the individual a higher tax code or higher RWT rate:
                              1. the individual has used a tailored tax code under schedule 5, part A in relation to the income.

                                1. For the purposes of subclause (2), the income is—

                                2. an amount of income for which the obligations of the individual under the PAYE rules are not met:
                                  1. an amount of investment income from which RWT is withheld at a rate that is lower than the correct rate:
                                    1. an amount from which tax is withheld at a rate that is lower than the correct rate when the amount of income is—
                                      1. a schedular payment:
                                        1. income from employment that is an extra pay:
                                          1. income from employment that is secondary employment earnings:
                                          2. an amount derived by an individual whose annual gross income is more than $48,000 when the amount of income is—
                                            1. a taxable Maori authority distribution:
                                              1. an amount of salary or wages from employment as an election day worker, when the individual has used the EDW code:
                                                1. an amount of salary or wages from employment as a casual agricultural employee, when the individual has used the CAE code:
                                                2. an amount of a benefit under an employee share agreement in relation to which an employer has not made an election under section RD 7B of the Income Tax Act 2007 to withhold tax.

                                                  1. For the purposes of subclause (3), the correct rate is—

                                                  2. 0.105, if the individual’s annual gross income is $14,000 or less; or
                                                    1. 0.175, if the individual’s annual gross income is more than $14,000 and not more than $48,000; or
                                                      1. 0.300, if the individual’s annual gross income is more than $48,000 and not more than $70,000; or
                                                        1. 0.330, if the individual’s annual gross income is more than $70,000.

                                                          Notes
                                                          • Schedule 8 clause 2: replaced, on , by section 112 of the Taxation (Annual Rates for 2018–19, Modernising Tax Administration, and Remedial Matters) Act 2019 (2019 No 5).
                                                          • Schedule 8 clause 2(2)(a): amended (with effect on 1 April 2020), on , by section 232(1) of the Taxation (Annual Rates for 2021–22, GST, and Remedial Matters) Act 2022 (2022 No 10).
                                                          • Schedule 8 clause 2(3)(c)(i): replaced (with effect on 1 April 2020), on , by section 231(2) of the Taxation (Annual Rates for 2021–22, GST, and Remedial Matters) Act 2022 (2022 No 10).

                                                          3Small amounts of tax payable

                                                          1. Despite clause 2, the Commissioner may write off an amount of tax under section 22J if the amount is not substantial and represents an underpayment of tax that is attributable to a function or operation of the tax collection rules.

                                                          Notes
                                                          • Schedule 8 clause 3: replaced, on , by section 112 of the Taxation (Annual Rates for 2018–19, Modernising Tax Administration, and Remedial Matters) Act 2019 (2019 No 5).