In the lifetime of any company, closing up and temporarily stopping business activities is a common occurrence. If a company is stopping its taxable activities but is not permanently closing up, it may need to apply for a non-active status with Inland Revenue by completing a non-active company declaration (IR433) form.
There are a few things you need to consider before applying for a non-active status.
A business should meet certain criteria to be considered a non-active company. A non-active company is one that has:
- Not received gross income from any source.
- Made no deductions or disposed of any assets.
- Made no other transactions during this time.
There are two primary benefits of applying for a non-active status
- If your application is accepted, you won’t have to file tax returns until your business is reactivated.
- The previous losses and assets will still remain in the business and can be used after the company re-operates.
Over the last financial year, a non-active company can’t have:
- made any transactions that gave rise to gross income for any person,
- provided fringe benefits tax to any employee or any former employee, or
- a debit in the company’s imputation credit account.
One more thing to keep in mind is that you still need to file the annual return with the Company Office unless you want to consider applying for the removal of your company from the register.
Premium Accounting Solution is your one-stop service for all things accounting. By simply providing us with the related information, we can give you an overall evaluation and analysis of your business’ current situation, and advise on whether it is reasonable for you to apply for a non-active company status. If your business meets all the requirements to be considered non-active, we can help you complete this application, and file the annual return with the Company Office in a timely way.
Premium Accounting Solution provides professional and reliable tax services and more throughout New Zealand. Reach out to us today for a quote and to see how we can help you!