New Zealand Tax Agency Issues Technical Decision Explaining Tax Treatment of Deductions, Understated Income

The New Zealand Inland Revenue April 14 posted online Technical Decision Summary No. 22/06, explaining tax deductions and understated income on a company’s tax returns. The taxpayer was a consultancy company that submitted its GST and income tax returns, which were subject to dispute by the tax authorities. The issues were whether the taxpayer was entitled to the deductions it claimed for GST and income tax, whether the taxpayer included all its income on its tax return, and whether the taxpayer owed penalties for noncompliance. The tax counsel clarified that: 1) the taxpayer wasn’t eligible for the input tax deduction, ...