Tax Pooling

Date: 29th March 2012

You can easily save more than 25% of IRD’s interest cost on your provisional tax. All with the seal of approval of the IRD.

If you don’t pay the correct amount of tax on time the IRD charge you interest. The current rate is 8.89%.

Tax pooling is a service introduced by Inland Revenue in 2003 that allows provisional taxpayers to reduce their exposure to IRD interest costs.

How it works: When we have finished your income tax return, we will inform you whether you owe any further tax to IRD. In many cases, you will also owe IRD interest.

Tax pooling allows you to buy tax credits that other taxpayers do not need. These tax credits have already been paid to IRD, but through the tax pool can be transferred from the seller to you. The cost of buying those credits is substantially less than paying IRD interest.

The table below shows the savings you can make on 2011 underpaid provisional tax if purchased in March 2012.

 

Underpaid Provisional Tax

 

Estimated Savings

 

$10,000

 

$268

 

$20,000

 

$536

 

$30,000

 

$803

 

$50,000

 

$1,338

 

$100,000

 

$2,675

 


We can quickly arrange a tax purchase on your behalf as we work closely with NZ’s leading tax pooling company, Tax Management NZ. They’ve assisted thousands of NZ companies and individual provisional taxpayers in saving money.



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