IR3NR Question 31 Refunds and/or transfers

If you’re entitled to a refund, you may:

have it direct credited to the New Zealand bank account shown at Question 7 or other deposit account, for example, a building society account shown at Question 7
transfer all or part of it to cover someone else’s income tax debit
transfer all or part of it to pay your 2020 provisional tax
receive it by cheque. All cheques are issued in New Zealand currency.

If you’ve made payments towards your 2020 provisional tax and, after completing this return, you find that you have less or no provisional tax to pay, the overpayment can be included in the amount Inland Revenue refund or transfer. Print the overpaid amount in Box 31B.

Direct credit

If you choose direct credit you get your refund faster and you can withdraw your money as soon as it’s credited because there’s no clearance time.

Inland Revenue pay any refund over $1.00 directly into your New Zealand bank account as soon as we’ve processed your return. Make sure your correct account number is printed at Question 7 on the front page of your return.

Transfers

If you’d like your refund transferred to another account or to arrears being paid off through an instalment arrangement, you’ll need to tell Inland Revenue the date you’d like your excess tax transferred (the “transfer date”).

The date you can choose depends on what tax has been overpaid and whose account you want the credit transferred to.

Requesting transfers on your return

You can ask Inland Revenue to transfer a refund to another account by filling out the boxes on page 5 of your return.

If you ask for a transfer on your return, Inland Revenue will transfer your refund at one of the following dates:

Transfer to your own account or an account of someone associated to you, the later of:

the day after your balance date (or 1 April if your balance date is before 31 March), or
the due date in the destination account.

Transfer to an account of someone not associated to you:

the day after your return was filed.

If you don’t tell Inland Revenue the date you’d like your credit transferred, they will transfer it at a date they think gives you the greatest advantage. If you’d like the credit transferred at a different date, you can contact Inland Revenue and ask for the transfer date to be changed (including if they have transferred your credit to cover a debt).

Associated taxpayers

The following are associated taxpayers for the purposes of transferring overpaid tax:

a company you’re a shareholder-employee in
a partner in the same partnership
a relative (for example, child, parent)
spouse or partner
a trustee of a family trust you’re a beneficiary of.

Transfers requiring a separate note attached to the return

If you are requesting a transfer at a future date, transfer to arrears being paid off by an instalment arrangement and transfers at a different date, you will need to attach a note with the below details to your return:

the amount you want transferred
the account you want it transferred to, for example name, IRD number, tax type and period end date (and if it’s another person whether they’re associated)
the date you’d like the credit transferred
if it is to be transferred to debt covered by an instalment arrangement.

Are you entitled to an early payment discount?

The early payment discount is available for people who:

are new in business, and
haven’t yet begun to pay provisional tax, and
in the case of a standard balance date taxpayer, have made a payment or payments on or before 31 March 2020 for income tax for the period 1 April 2019 to 31 March 2020.

The discount is calculated at the rate of 6.7% of the lesser of either:

the amount paid during the year, or
105% of your end-of-year residual income tax

and is credited against your end-of-year tax bill.

To check if you qualify, work through the flowchart below.

Terms Inland Revenue use

Provisional tax—this is tax paid in instalments during the year, based on what you expect your income to be, or what it was last year.

Assessable income—income that is not exempt income or excluded income (for example, a government grant to a business). Assessable income includes undeclared business income you may have earned (for example, cash jobs).

Year—as referred to in the diagram below, year means the standard tax year from 1 April to 31 March, unless you have an approved different balance date, in which case your income year will end then.

If you have any questions about your entitlement to the discount, please contact Inland Revenue.