NZ Tax: Abolition of Foreign Dividend Payment (FDP) Regime in New Zealand
Foreign Dividend Payment (FDP) Regime, which allows companies in New Zealand receive foreign dividends mostly free (without being subject to tax) is about to be abolished, after the new changes in New Zealand taxation regime become alive.
The new announcement brings some changes about international taxation issues in New Zealand. After the abolition of Foreign Dividend Payment (FDP) Regime, foreign dividends which are gained by companies in New Zealand will not be free of tax. The reason is that the exemption of income tax for dividends is also being abolished. As a result, if the dividends doesn't drop into the group for having a tax exemption, then the company will pay tax on them.
2009 Q3 is the fist quarter which the abolition of Foreign Dividend Payment (FDP) Regime will begin. Foreign Dividend Payment (FDP) Regime will be abolished in 2009 - 2010 tax year for companies with fiscal year beginning after June 30, and 2010 - 2011 tax year for companies with a fiscal year beginning before June 30.
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