In running a business you need to account for income tax on your profits and the

expenses/deductions you may claim against your income. During the tax year you must
generally pay provisional tax, which is a series of instalments of income tax for this tax year.
You pay income tax on your net profit for the year. To work out your net profit, deduct your
business expenses from your income for the year.
The Tool for business
The Tool for business helps you get all your small business tax issues sorted quickly and simply.
Filing business income tax returns
IR3 and IR3NR customers who earn income other than salary and wages will need to file an income tax return.
If you're in business, you'll need to complete and send us an income tax return, that is an IR4, IR6, IR7, IR8,
IR9 or IR44. Find out more about the types of business income tax returns, the due dates for completing them
and the financial reporting you may need to do.
Claiming business expenses
Most businesses incur expenses when generating income and most of these can be deducted from its income
to arrive at its net profit or taxable income. It is on this amount that you pay income tax. Certain business
expenses that are paid for out of business income cannot be claimed as allowable business expenses.
Watch our short video on claiming business expenses
Depreciation
Depreciation allows for the wear and tear on a fixed asset and must be deducted from your income. You must
claim depreciation on fixed assets used in your business that have a useful lifespan of more than 12 months.
Not all fixed assets can be depreciated. Land is a common example of a fixed asset that cannot be
depreciated. Learn about methods of depreciation and the records you must keep.
Watch our short video on depreciation
Imputation
Imputation is a tax mechanism available to registered companies and certain other types of business.
Paying tax
If you are running a business, you will need to fill out a tax return each year and send it to us by the due date.
When completing your tax return you will need to include income from all sources, and work out the tax on your
total taxable income. Learn about which income tax rate applies to your type of business, when income tax
returns should be sent in and what income tax returns to use.

What to do if your business is making losses

If the total deductible expenses for your business are greater than its income then it will have a loss for tax
purposes. The business will not have to pay tax and the loss can generally be used to reduce income in future
income years. The rules for using losses depend on whether the business is run through a company, trust or as
a sole trader.
Income equalisation scheme
The income equalisation scheme allows farmers, fishers and foresters who are eligible taxpayers to even out
fluctuations in income by spreading their gross income from year to year.
Information about relief in the event of extreme weather
Find out about tax relief and income assistance if you are affected by extreme weather. People who are
currently entitled to these provisions are those affected by drought in the Central and East Coast Districts of the
North Island and North Canterbury.
Paying yourself from your business
If you're in business, you will need to pay yourself to meet your personal living costs. How you do this depends
on the business structure you are operating under.
Overseas currency - conversion to NZ dollars
We publish different exchange rates for different purposes. This page will explain what they are and which one
to use.
Business income tax basics
Learn the basics of business income tax plus including what a business pays income tax on and additional
information on income tax during the first year of business including the early payment discount available for
the first year of paying provisional tax.
Glossary of business income tax terms
Glossary of the terms used in business income tax publications including: Balance date; Capital expenditure;
Depreciation; and more.