The Financial statements summary (IR10) form collects information for statistical purposes. Inland Revenue use this information to evaluate tax compliance risk, form policy and for strategic research. Inland Revenue pass information on to Statistics New Zealand, which produces a national business database supporting whole-of-government economic, fiscal and monetary decision making.
Completing an IR10 helps speed up the processing of tax returns. If an IR10 is completed, financial statements don’t have to be included, although they may be requested later. The IR10 is a summary of the financial statements of a business and does not replace them.
Most companies have a statutory obligation to prepare financial statements. The exceptions are companies approved as non-active and very small companies that meet the exemption criteria. For more information, go to the Inland Revenue website www.ird.govt.nz (search keywords: financial reporting).
All the figures in the IR10 are financial accounting figures, except for:
Box 28 Tax adjustments
Box 29 Current year taxable profit/loss
Box 52 Tax depreciation
Box 59 Tax-deductible – loss on disposal of fixed assets
Where financial statements are only prepared using tax concepts to arrive at the income/loss to be returned for tax purposes, the figures from these financial statements should be entered into the IR10.
If financial statements haven’t been prepared, fill in the IR10 using information from the trial balance, or financial records.
To decide if you need to fill in an IR10, you must determine if you are in business. The Income Tax Act 2007 defines business as including any “profession, trade, or undertaking carried on for profit”.