The best process is to obtain the seller’s IRD tax compliance certificate, review recent income tax, GST, and payroll returns, and have a qualified accountant or tax advisor verify records for accuracy and any outstanding obligations before finalizing the purchase.

When doing due diligence in New Zealand, checking a seller’s IRD compliance is one of those steps that can feel nerve-wracking but absolutely necessary. The best process is to request official tax records and a current tax compliance certificate from the seller, review recent income tax, GST, PAYE, and provisional tax filings, and confirm there are no outstanding audits, disputes, or payment arrangements. Many buyers also have their accountant or tax advisor verify the records directly with the IRD where possible. It might feel awkward to dig this deep, but doing so gives real peace of mind you won’t inherit unexpected tax headaches after the sale closes.