From an information guide prepared by the "special audit" unit of New Zealand's Inland Revenue Department, "to assist in answering questions from sex workers." The special unit collects taxes on income from illegal activities, such as drug sales, prostitution, fraud, theft, money laundering, kickbacks, extortion, and bribes, raising $200 million in taxes since its inception.

Sex workers can describe their occupation on Inland Revenue Department forms as Contractor, Consultant, Commission Agent, Hostess, Receptionist, Entertainer, or any other similar description. They can reduce the amount of tax owed at the end of the year by deducting certain expenses from their business as private operators. The various expense items are explained below. Please not that this is by no means an exhaustive list.

Consumable Items

The total cost of consumable items is an allowable deduction. These include condoms, lubricants, gels, oils, tissues, bubble bath, dairy whip, and other similar items used when providing service to a client.

Clothing

Clothes that will be used only when earning income may be deducted. Examples would be lingerie, costumes, and any see-through garments.

Stockings/Makeup/Hair Care

Although these are not usually an allowable deduction for other industries, given the nature of the job, the Inland Revenue allows private operators to claim a portion of their expenditure on these items. If they buy a certain type only for work (such as patterned stockings), it can be fully claimed.

Motor Vehicle

For each business trip, they must record the date, the distance traveled, and the reason for the trip. Travel from their residence to their place of work (e.g., a parlor) is a private expense and is not deductible.

Private Expenditure

Some expenses are generally considered to be of a private nature and therefore are not tax deductible. These include gym fees, drugs and drug rehabilitation, fines, and associated legal fees.

Medical Expenses

Private operators can claim industry-specific medical expenses, such as HIV and STD tests. Further, medical expenses that may be deductible depending on the circumstances include pregnancy tests, abortions, and cosmetic surgery.

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