New provisional tax rules

New changes in income tax rules have been made to ease up business owners tax liabilities.

The old rules unfairly assumed a business could accurately predict its income tax liability before it had earned a dollar and could pay in three equal instalments, he said.

Businesses will no longer need to continuously estimate their liability throughout the year under the new rules. If they pay provisional tax based on a 5 per cent uplift of last year's liability, they will not be liable for IRD interest payment intermediary.

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