Legal Expenses

• Some business legal expenses are deductible according to the act. If your legal expenses for a tax year total $10,000 (New Zealand) or less, you can deduct the whole amount from your business's taxable income. Legal expenses cover all legal services, but the person providing the legal services must hold a certificate issued by the New Zealand Law Society, which allows the person to practice law and provide legal services. The act also allows you to deduct expenses for legal services provided with someone who holds an equivalent practice certificate issued in Australia.
  
  

Closing Values

• Section 5 of the act amends Section EB 23 of the Income Tax Act of 2007. In the 2007 act, Section EB 23 deals with the valuation of stock at the end of a financial year for accounting purposes, for businesses with a low turnover. This section of the act defines low-turnover businesses as those having a turnover of less than $1.3 million. If you have a low-turnover business and you estimate the value of your closing stock at the end of the year as less than $10,000, you do not have to calculate the current market value of your stock, but may use the opening value, saving you time in preparing your accounts. Prior to the 2009 act, the threshold for closing stock valuations was $5,000.
  
  

Provisional Tax

• The Tax Administration Act of 1994 requires business taxpayers to pay provisional tax in advance, and this amount is adjusted when the tax payer submits a final tax return for that year. Section 20 of the 2009 act replaces Section RZ 3 of the 1994 act and states that provisional tax is no longer estimated at a rate of 105 percent of the tax paid for the previous year. After the 2009 act, the standard calculation of provisional tax is based on 100 percent of the amount paid in tax in the previous year, but if you are a new tax payer, the calculation is based on 90 percent of your anticipated income for your first year of trading.
  
  

Goods and Services

• The Goods and Services Tax (GST) is a sales tax applied to the supply of all goods and services in New Zealand. GST is governed by the Goods and Services Tax Act of 1985, and Section 25 of the 2009 act amends a provision of the 1985 act concerning taxable periods. All businesses must submit a GST tax return on a regular basis, being either every six months, every two months or monthly. According to the amendment contained in the 2009 act, you may choose to make your GST return every six months if you do not believe that your taxable supplies will exceed $500,000 in any 12-month period. This amends Section 15 (2)(a) of the 1985 act, which set the threshold at $250,000.