Bank & Finance Charges — New Zealand Tax Rules

Claim business bank fees, loan interest, and payment processing charges incurred in earning NZ income.

Claimable: Fully claimable · Tax authority: Inland Revenue

Inland Revenue Rules

• Business bank account fees — monthly account fees, transaction fees, overdraft fees — are fully deductible.
• Interest on loans used wholly for business purposes is deductible; the capital repayment portion is not.
• Payment processing fees (Stripe, Square, Windcave, PayPal) charged on business transactions are claimable in full.
• Foreign exchange conversion fees on business transactions are deductible.
• Personal bank charges on a personal account are NOT deductible — IRD recommends a separate business bank account.
• If you use a personal account for business, only the charges directly attributable to business transactions may be claimed, with documentation.

Limits

No cap — all bank charges and interest must be incurred for business purposes. Interest must be on a loan used to earn assessable income.

Worked Example

Levi's ANZ business account costs NZ$12/month (NZ$144/year). He pays NZ$280 in Stripe processing fees on client payments. He has a NZ$10,000 business equipment loan at 8% interest — annual interest: NZ$800. Total claim: NZ$144 + NZ$280 + NZ$800 = NZ$1,224.

Record Keeping

• Keep monthly bank statements showing all fees and charges
• Retain payment processor monthly statements (Stripe, Square, PayPal dashboards)
• Keep loan agreements showing interest terms and repayment schedules
• Separate business from personal banking clearly — a dedicated business account is recommended
• Record any overseas transaction or foreign exchange fees with the related business transaction

Frequently Asked Questions

Can I claim interest on a business loan used to buy equipment?

Yes. Interest on a loan used to purchase business equipment or fund business operations is fully deductible. Only the interest portion is deductible — the capital repayment reduces the loan principal and is not a deductible expense.

Are PayPal and Stripe processing fees deductible?

Yes. All payment processing fees on business transactions — Stripe percentage fees, PayPal withdrawal fees, Square transaction fees, and Windcave gateway charges — are fully deductible business expenses.

Can I claim bank fees on a personal account I use for business?

IRD strongly recommends a separate business account. If you use a personal account for business, you may claim the proportion of fees attributable to business transactions, but you need clear documentation. A dedicated business account makes this straightforward.

Are credit card annual fees deductible if I use the card for business?

If a credit card is used exclusively for business, the annual fee is deductible. If used for both personal and business, claim the business-use proportion of the annual fee. Credit card interest on business purchases is deductible; interest on personal spending on a shared card is not.

How does GST registration affect my bank and finance charges?

Once registered for GST (mandatory above NZ$60,000 taxable turnover), you can claim back the 15% GST on bank charges and payment processor fees from NZ-registered financial service providers that include GST. In practice, most NZ bank account fees are GST-exempt under the financial services exemption, but Stripe, Square, and merchant terminal fees may include GST — check each provider's tax invoice in myIR.