It’s one thing to be resourceful, and another to be an entrepreneur - there are a wide range of business and taxable activities that are often not thought of as such.
Selling things on Trade Me, having a rental property, renting your house out over summer or selling crafty creations at the market might sound insignificant, but the law is clear when it comes to what is a business or taxable activity, and what’s not.
So while you may not think you are in business yet, you may find that as far as the government is concerned, you are already conducting taxable activity.
According to Inland Revenue, you are generally in business when you start charging others for goods or services you provide, supply goods or services regularly, and intend to make a profit from doing so.
Generally, any income you receive from renting out property will be liable for income tax. This applies if you rent out a room, have an investment property or are in the business of letting properties.
Being aware of the law and your obligations from the get go can help you avoid unwanted tax surprises.
Business.govt.nz is a great place to start if you’re thinking about a grass-roots business, or want to check that what you are doing, and how you’re doing it, is within the law.
Inland Revenue also has information to help you determine whether you are in business (external link) .
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