INTHEBLACK August 2021 - Flipbook - Page 16
// FAS T F O C U S
STORY GARY ANDERS
THE DEEP END
OF THE TAX
NEW ZEALAND BUSINESSES CAN TAKE ADVANTAGE OF TAX
POOLING, A UNIQUE SYSTEM REMINISCENT OF THE BUY NOW,
PAY LATER SERVICE THAT’S BEEN BOLSTERING RETAIL SALES.
16 ITB August 2021
The system of provisional
tax pooling in New
businesses to pay their
taxes annually through a
broker, instead of every
Businesses can also sell
excess tax payments into
the tax pool and earn
interest on those funds.
ew Zealand businesses are presented with
provisional tax bills from the Internal Revenue
Department (IRD) three times a year, with
payments due in January, May and August.
However, instead of having to dig into their cash
flow to pay their tax liability by the due dates,
businesses have the option of delaying parting with
their funds by using the services of non-bank
intermediaries known as tax poolers.
HOW TAX POOLING WORKS
New Zealand’s tax pool system combines income
tax payments from businesses across the country
and allows taxpayers to, effectively, trade those tax
payments to match their needs.
Instead of paying tax directly to the IRD, a
business has the option of using the tax pool
whenever it suits them.