Starting a business in New Zealand: your first-year tax checklist

Published 3 October 2026. General information, not advice for your business.

Inland Revenue's own advice to anyone starting out is to understand your responsibilities from the start, to avoid penalties and interest. It also recommends getting advice from an accountant, lawyer, tax agent or business advisor.

This checklist covers the tax side, so you know what the questions are before you sit down with anyone.

1. Choose your business structure

Inland Revenue describes three structures most businesses use.

• Self-employed, including sole traders and contractors. You use your own personal IRD number, you are taxed at the rates for individuals, and you pay tax on your net profit through an individual income tax return.
• Partnership. The partnership has its own IRD number, and each partner also needs a personal IRD number.
• Company. A company is separate from the people who own it. It has its own IRD number, is registered with the Companies Office, and most companies pay 28% income tax. Companies file tax returns with Inland Revenue and annual returns with the Companies Office.

How tax works in a partnership

A partnership files a tax return, but it does not pay income tax itself. The profit or loss is shared between the partners, and they pay the tax.

• The partnership files a partnership income tax return (IR7) each year, showing its income and expenses. With it goes an income or loss attribution (IR7P), showing how much profit or loss went to each partner. If the partnership needs to register for GST, it registers in its own right.
• Each partner includes their share in their own individual income tax return (IR3), using their own IRD number. A share of a loss can be claimed against the partner's other personal income.
• The split. In an ordinary (general) partnership, profits and losses are shared equally unless your partnership agreement says otherwise. If you want a different split, put it in the agreement.
• Provisional tax. Income from a partnership is one of the common reasons people pay provisional tax. Whether you pay it depends on the tax on your own return.
• Debts. In an ordinary partnership, if there is a debt, each partner can be made to pay the full amount. In a limited partnership, a limited partner is only liable up to the amount they invested. A company, by contrast, is separate from the people who own it.

Example: two partners share equally and the business makes $80,000 profit. The partnership's return shows $40,000 going to each of them. Each partner then includes their $40,000 in their own IR3, along with any other income they have.

Inland Revenue warns that it can be expensive to change your structure later, so it is worth choosing well. There is no answer that is right for everybody. It depends on what you are doing, what you expect to earn, what risk you are carrying and what you want the business to become.

2. Sort out your IRD numbers

Your IRD number identifies your business for everything tax related. If you are self-employed, it is your personal number. A partnership or a company needs its own.

3. Work out where you sit with GST

You do not have to register for GST just because you start a business. You must register once your turnover reaches $60,000 over twelve months, or you expect it to over the next twelve. Once registered you charge 15% GST and can claim GST back on your business costs.

When you have to register for GST

4. Plan for your first year of income tax

This is the one that catches people out.

If you use the standard, estimation or ratio options, you do not pay provisional tax during your first year. But your first year is not tax free. The income tax for it is usually due by 7 February the following year, or by 7 April if you have a tax agent.

That can mean paying your first year's tax at the same time as provisional tax for your second year. Inland Revenue lets you make voluntary payments during your first year to spread the cost, and you may be able to get an early payment discount for them.

5. Know when your return is due

The tax year runs from 1 April to 31 March. If you are self-employed, your individual income tax return (IR3) is due by 7 July, unless you have a tax agent or an extension of time.

6. Set up your records from day one

Keep records of all your sales and expenses, cash and non-cash, and keep them for at least 7 tax years. Your records must be in English or Māori unless Inland Revenue approves another language. If you keep them offshore, including in cloud software, either you or your provider needs Inland Revenue's approval.

Setting up a simple system at the start is far easier than rebuilding a year of receipts at the end.

7. If you will employ people

When you start employing staff, you need to register as an employer and make deductions from their pay.

How Heidi helps

Business setup support is one of the four things It's In The Details does. Heidi helps you choose the right structure for your situation, understand the tax implications of your decisions, and set up systems that work from day one.

She works with businesses at every stage, from the idea phase onwards. Getting the setup right early is usually cheaper and simpler than unpicking it later.

What business setup support includes

The numbers worth knowing once you are trading