31 March 2016 is the last day for 2015 tax returns to be filed under IRD's extension of time arrangements ("EOTs"). If you do not file your 2015 return in time you risk losing your EOT arrangement and may incur a late filing penalty. The key outcome of losing an EOT arrangement is that you w ill need to file your 2015 and 2016 tax returns by 7 July 2016 if you w ant your EOT provisions to be reinstated for your 2017 tax return.
Late filing penalties are graduated according to income:
Net Incom e Penalty
Less than $100,000 $50
$100,000 to $1 million $250
More than $1 million $500
Irrespective of a company's balance date, you need to ensure that your imputation credit account (ICA) balance is not in debit at 31 March. If an ICA is in debit at 31 March, further income tax, equal to the debit balance, must be paid to the IRD together w ith a 10% penalty. This 10% penalty does not create a credit in the
ICA.
Checking the ICA balance before 31 March and voluntarily paying income tax sufficient to clear the debit balance by 31
March can avoid the penalty tax.
Loss offsets and subvention payments relating to last year’s taxes must be filed w ith the IRD and paid by 31 March of the year follow ing the year the deduction w as claimed (again, regardless of your balance date).
If you expected to be a provisional taxpayer for 2016, but found that is not the case, you need to elect to be a provisional taxpayer if you w ant to receive use of money interest on any overpayment made. This election needs to be made w hen first furnishing your 2016 tax return to the IRD.
Review your annual profit and ensure sufficient provisional tax has been paid. You can make an extra payment at any time in order to reduce Inland Revenue use of money interest accumulating at 9.21%.
If you are a sole trader or partnership in your first year of business, you can receive a tax discount by making payment prior to 31 March.
If you have a March balance date, any terminal tax for 2015 is due on 7 April 2016, unless you have previously lost your EOT.
For employers, all w ages and salaries paid or credited to staff on or before 31 March 2016 must be included in the ir-File for
March 2016 or for the 2016 financial year. The latest payment dates are 5 April and 20 April 2016 for large and small employers respectively. Your Employer Monthly Schedules and
Payment Remittance forms are also due for filing on these days .
A company that is currently a standard company can elect to become an LTC for the 2017 income year provided that it files an election prior to its 2016 balance date.
If you intend paying a dividend at the end of the financial year you need to pass appropriate resolutions prior to this date for the payment of the dividend. The resolution must be detailed enough to allow the amount of dividend to be determined, either as a figure, or by reference to a formula.
Resident w ithholding tax must be deducted from the net dividend paid to the IRD by the 20th of the month after the dividend is paid. For a dividend imputed at 28/72 this equates to an extra 5 cents in the dollar liability.
Sole traders ow ning mixed use assets are required to make any
GST adjustments required for the mixed use asset in the GST return that aligns w ith balance date.
The GST return aligned to 31 March w ill be the first time this adjustment has been necessary, so care should be taken.

For the 2015 or 2016 income year, distributions of beneficiary income can be made during the income year or w ithin 12 months of balance date. Appropriate trustee resolutions must be completed w ithin this timeframe even if the amount of the distribution has not been finalised w ithin 12 months of balance date.
We note that many trust deeds still require that distributions must be made w ithin the income year or w ithin six months of balance date, so take care w hen contemplating distributions.
You need to ensure that you have made an adjustment in your
GST return for the GST on non-deductible entertainment expenditure in the income tax return. The adjustment is 3/23rds of the previous year's non-deductible entertainment expenditure.
Type
Stationery
Months $
No limit No limit
Subscriptions to new spapers, journals, and other periodicals
Postage and courier costs
No limit No limit
No limit No limit
Rates
Road user charges
Audit and accounting fees
Advertising
Consumable aids
No limit No limit
No limit No limit
No limit No limit
6 14,000
No limit 58,000
Prepaid insurance premiums (w here the total annual premium is less than
$12,000)
Lease or bailment of livestock
Other services
Rent for land and buildings
Service or maintenance contracts
(total annual cost less than $23,000)
12
6
6
6
3
No limit
23,000
12,000
26,000
No limit
Subscriptions for trade professional associations (total annual subscription less than $6,000)
12 No limit
Telephone and other communication equipment
2 No limit
Travel and accommodation expenses 6 14,000
Pre-paid expenses can be claimed even though they relate to the follow ing year. In some cases pre-paid amounts must be less than both specified time or dollar limits to be claimed.
Bad debts must be w ritten off before balance date to be claimed.
The IRD expects clear evidence of appropriate approvals and accounting entries having been made. A simple “provision” for bad debts cannot be claimed.
Employee benefits such as holiday pay and bonuses ow ing at 31
March can be claimed if paid by 2 June (i.e. w ithin 63 days of balance date).
Bonuses must be finalised before 31 March in order to be claimed. Bonuses dependent on approval or other conditions satisfied after 31 March cannot be claimed.
A stock take is required unless your stock is less than $10,000 and your turnover less than $1.3m.
Stock valuations are subject to detailed rules. Generally, no w rite dow n for obsolescence is allow ed unless this is reflected in sale prices.
Review your fixed asset schedule from last year and identify any assets that are broken, missing or disposed of.
If you ow n investments in companies that are resident outside
New Zealand, you w ill need to list and value them as at 31
March 2016. This w ill form the basis of the portfolio tax calculation w hich is generally levied on 5% of their value or the actual return made for the year. (There is no such tax payable by individuals w ho ow n overseas investments w hich altogether cost less than $50,000 in total.)
Losses on revenue account property can only be deducted if the losses are realised on or before balance date. People w ith property of this nature should consider the options available to them.
31 May is the due date for filing and paying FBT for the 4th quarter of the year and furnishing annual FBT returns. The election to use the multi-rate FBT rates is made w hen filing the
FBT return and paying at the FBT rate elected.
In Crow e Horw ath’s experience, many people avoid the use of the multi-rate rules because of the perceived complexity.
How ever, w e are often able to gain FBT savings by using the multi-rate provision
This information is of necessity general in n ature. Whilst every effort has been made to ensure accuracy, information contained may not be complete, may have changed or may not be relevant to or appropriate for your circumstances. You must not use the information without se eking professional advice. The information is not intended as legal, accounting, financial or tax advice. Crowe Horwath (NZ) Limited, related organisati ons, employees and directors are not liable to you or anyone else for decisions or actions resulting from placing reliance on this information.