Hi all,
I've a couple of questions/confusions which I want to clear. I am also going to consult an accountant but want to get suggestion from wider audience as well. Most of it is related to attribution rule and complying with it.
1) Can I setup a company with just one client (one source of income), have my wife as a shareholder, start paying her wage for administration work that she will be doing and make sure I comply with attribution rule by end of fiscal year ?
Some of my colleagues say I can start as a company with just one employer but make sure to comply by end of fiscal year.
2) In such condition, Will the company comply with attribution rule if, by the end of the fiscal year,
i) I took second job and am only the one generating income for company and,
a) None of the two jobs I do yield 80% or more income, and
b) my wife is just doing administration work for company and not generating any income for company herself.
ii) My wife generates at least 20% income through overseas client or another local client.
iii) I take on second job and generate some income, my wife generates some income, and the combined income of these two is 20% or more?
3) What will happen if the company fails to comply with attribution rule? Will the company face legal issue? or is it that at the end, IRD will say all of income will be taxed at individual tax rate and I'll have to pay according to that?
4) Any regulations on how much I might be able to pay my wife, given that it's not clear at this time whether/how much income she will be generating for company?
Your response will be much appreciated.
Thanks
Sandeep