Automatic Tax Refunds
The Inland Revenue Department are introducing “Automatic Tax Refunds” from April 2019.
This will apply for individuals who are not required to file an actual tax return.
It has always been possible for salary and wage earners (who do not have income from business, rental properties, dividends, trust distributions or other such sources) to claim any tax refunds due without using such tax refund companies, by simply logging into the IRD website and requesting a Personal Tax Summary. However these changes will make it even simpler for salary and wages earners.
Provided that Inland Revenue Department have correct contact details and bank accounts, any applicable refund will be automatically paid direct into taxpayers bank accounts from June 2019. This will eliminate the use of intermediary companies (such as mytaxrefund, nztaxrefunds, etc) who often set up shop in malls, and offer to facilitate individuals’ tax refunds, for a fee.
However, it is important to note that tax-payers who actually have income tax payable, will also be notified automatically that they have an amount to pay.
We would not expect this change to directly impact many of our clients – who will still be required to complete a full income tax return to reflect business, rental and/or investment income – however it is worth noting for those people who have income from salary and wages only.