IRD Voluntary Disclosure

Property, hospitality, and construction industries have been the focus of Inland Revenue’s investigations in the last few years.

Since the introduction of the Common Reporting Standard, the IRD risk review cases have increased in situations of omitted foreign income. This rule has been created to minimise tax evasion. It allows tax information to be shared between participating countries, so foreign assets and investments are more transparent to tax authorities than ever before.

Why would IRD request voluntary disclosure?

There are many reasons why Inland Revenue might undertake a risk review, audit, or query on a taxpayer. It could be an anonymous tip-off that includes specific and credible information, cross-checking with another business’ disclosure and validating GST invoices, or benchmarking the taxpayer’s information with industry standards.

We help clients with IRD Audits and Voluntary Disclosure

Our team has vast experience in dealing with Inland Revenue risk reviews/audits and in preparing voluntary disclosure letters. Our strong technical knowledge enables us to determine whether taxpayers have taken correct tax positions and whether Inland Revenue are correct in their interpretation of tax laws. We have a proven track record in reaching the best outcome for our clients.

How voluntary disclosures help with IRD audits? Here's a case study

A Hong Kong citizen migrated to New Zealand holding a significant Hong Kong share portfolio with a market value of approximately NZD 1 million. After being in New Zealand for more than 20 years, foreign investment fund income was never returned in his New Zealand income tax return. Inland Revenue issued him with a risk review letter when his Hong Kong portfolio came to light in 2020. We assisted with the submission of a voluntary disclosure letter reporting the omitted income to IRD, with the request for the remission of penalties and answered all other queries raised by IRD. We also arranged tax purchase via tax pooling intermediary to minimise the use of money interest exposure.

How to deal with an IRD risk review letter or audit letter?

In our experience, dealing with Inland Revenue letters is not for the DIY enthusiast and are best left to the experts. We are experienced in facilitating voluntary disclosure to Inland Revenue and correspond on behalf of taxpayers.

We endeavour to minimise tax shortfall and penalties for our clients. In our experience, we have successfully remitted 100% penalties for most, if not all, cases. If IRD charges use of money interest, we may utilise tax pooling intermediaries to minimise use of money interest costs.

If you would like to know more about International & Cross Border Tax, click here.