Lawyer description
The IRS will take advantage of a
taxpayer who is not knowledgeable about the tax law or
IRS audit and collection procedures. Taxpayers need to
be protected from IRS error, abuse, and intimidation.
Taxpayers frequently overpay their tax liability either
as a consequence of inappropriate IRS actions, or
because they do not have the counsel of a skilled and
experienced tax lawyer.
A tax (also known as a "duty") is a financial charge or
other levy imposed on an individual or a legal entity by
a state or a functional equivalent of a state (e.g.
tribes, secessionist movements or revolutionary
movements). Taxes could also be imposed by a subnational
entity.
Taxes consist of direct tax or indirect tax, and may be
paid in money or as corvée labor. In modern, capitalist
taxation systems, taxes are levied in money, but in-kind
and corvée taxation are characteristic of traditional or
pre-capitalist states and their functional equivalents.
Taxes are usually collected by a governmental agency
such as the Internal Revenue Service in the United
States or HM Revenue and Customs (HMRC) in the UK. When
taxes are not paid to a government's satisfaction, civil
penalties such as fines or forfeiture are carried out
against the non-paying entity or individual. These
penalties could also have criminal penalties such as
imprisonment enforced by governmental investigators,
such as the Federal Bureau of Investigation and the
Department of Justice in the US. In most modern
industrialized countries, when an individual fails to
pay his government the taxes, it will ultimately result
in the loss of money and not imprisonment (unless fraud
was a serious factor).
The means of taxation, and the uses to which the funds
raised through taxation should be put, are a matter of
hot dispute in politics and economics, so discussions of
taxation are frequently tendentious.
Taxation in New Zealand is collected at a national level
by the Inland Revenue Department (IRD) on behalf of the
Government of New Zealand. National taxes are levied on
personal and business income, as well as on the supply
of goods and services. There is no capital gains tax,
although certain "gains" such as profits on the sale of
patent rights are deemed to be income.
Local property taxes (rates) are managed and collected
by regional councils.
New Zealand went through a major programme of tax reform
in the 1980's. The top marginal rate of income tax was
reduced from 66% to 39% and corporate income tax rate
from 48% to 33%. Goods and services tax was introduced,
initially at a rate of 10% (now 12.5%). An OECD report
in 2001 described the New Zealand tax system as one of
the most neutral and efficient within its membership.
Tax reform continues in New Zealand with key issues
being:
business taxes and the effect on productivity and
competitiveness of NZ companies
differences in the treatment of various types of
investment income
international tax rules.
Business income tax
Businesses in New Zealand pay income tax on their net
profit earned in any specific tax year. For most
businesses the tax year runs from 1 April to 31 March
but businesses can apply to the IRD for this to be
changed.
Payments are made in three instalments through the year.
These are known as provisional tax payments. At the end
of the year the business files a tax return (due on the
following 7 July for businesses with a tax year ending
31 March) and any under or overpayment is then
calculated.
Companies pay income tax at 33% on profits. Tax rates
for individuals operating as a business (eg individuals
who are self-employed) are the same as for employees.
Goods and Services Tax
Main article: Goods and Services Tax (New Zealand)
Goods and services tax (GST) is an indirect tax
introduced in New Zealand in 1986. This represented a
major change in New Zealand taxation policy as until
this point almost all revenue had been raised via direct
taxes. GST now makes up 19% of the New Zealand
Government's core revenue.
Most products or services sold in New Zealand incur GST
at a rate of 12.5%. The main exceptions are financial
services (eg banking and life insurance) and the export
of goods and services overseas.
All businesses are required to register for GST once
their turnover exceeds (or is likely to exceed) $40,000
per annum. Once registered, businesses charge GST on all
goods and services they supply and can reclaim any GST
they have been charged on goods and services they have
purchased.
Fringe Benefit Tax
Main article: Fringe Benefits Tax (New Zealand)
Employers are liable to pay Fringe benefit tax (FBT) on
benefits given to employees in addition to their salary
or wages (eg motor vehicles or low interest loans)
There are several methods available for calculating FBT
liability, including an option of paying a flat rate of
64% on all benefits provided. |
