Tax Admin

Question 1

Who is a provisional Taxpayer?

Answer 1

If residential income for previous year > $2,500

Question 2

What is the RIT formula?

Answer 2

Income tax - IC - PAYE - RWT

Question 3

What are the methods used to calculate provisional Tax?

Answer 3

AIM
GST Ratio
Standard Uplift
Estimation

Question 4

AIM?

Answer 4

Used from accounting packages

Question 5

GST ratio?

Answer 5

Calculated as a % of GST

RIT/GST Taxable

Question 6

Standard Uplift?

Answer 6

Provisional tax = Previous year RIT x105%
If return not filed
- RIT 2 Years earlier x110%

Question 7

Estimation Method?

Answer 7

Estimation

Requires reasonable care

Question 8

When are provisional tax installments due?

Answer 8

Not GST registered = 3 Installments
GST 1 or 2 monthly = 3 Installments
GST 6 monthly = 2 Installments
Ratio Method = 6 Installments

Question 9

What if we underpay provisional tax?

Answer 9

Pay 8.35% interest from day after due until balance paid in full

Question 10

What if we overpay provisional tax?

Answer 10

Paid 0.81% from later of day after originally due AND the day after payment ends day after refunded or transferred

Question 11

When does UOMI Apply

Answer 11

AIM
   -Underpayments not over 
GST Ratio
    - No UOMI
Estimation Method
    - Applies to each installment date
    - Treat RIT as provisional for year

Question 12

When do safe harbors apply

Answer 12

When using standard uplift, all provisional tax payments made in full on time,

Question 13

What are the civil penalties?

Answer 13

Failure to complete and file tax return on tom fine $50 - $500
1% unpaid tax day after the due day
4% unpaid tax 6 days after the due day
Incremental 1% per month after that

Question 14

What is the shortfall penalties?

Answer 14

Not taking reasonable care = 20%
unacceptable tax position = 20%
Gross careless ness = 40%
Abusive tax position 100%
Evasion = 150%

Question 15

Penalties for failing to maintain records or provide GST Info?

Answer 15

1st = $4,000
2nd = $8,000
3rd = $12,000

Question 16

Penalties for knowingly failing to maintain records or provide GST Info?

Answer 16

1st $25,000

any others = $50,000