TAX RATES > New Zealand Tax Rates

new-zealand-tax-rate

New Zealand Tax Rates

New Zealand personal Income Tax Rates

New Zealand individual income tax rates are 39% beginning 1 April 2010.

Taxable Income (NZ$)      Rate of tax
$0 - $17,500                   12.5%
$17,501 - $40,000           21%
$40,001 - $75,000           33%
$75,001 and over             39%


Income tax is payable by New Zealand residents on their worldwide income. Nonresident individuals pay tax on New Zealand-sourced income only. An individual is resident in New Zealand if personally present for more than 183 days in any 12-month period or if the individual has a 'permanent place of abode' in New Zealand.

Individuals arriving to live in New Zealand on or after 1 April 2022 may qualify for a temporary tax exemption as a transitional resident on foreign income. All foreign-sourced income will be exempt, except for employment income connected with employment performed while in New Zealand and income from services. The exemption applies to the first 48 months (four years) following arrival in New Zealand. To qualify, an individual cannot have been tax resident in New Zealand during the previous ten years.

Income tax is payable on gross income less allowable deductions. Gross income includes employment income, business income, rents, interest and dividends. Certain donations, rebates, low income rebate, family support tax credits and child care credits are available.

Employment income (salary/wages) has tax payments deducted from each salary/wage payment.

Self-employed individuals and those receiving income with no tax deducted at source pay provisional tax in three instalments based on their previous year's taxable income, with a final payment within 11 months after balance date (or 13 months after balance date where the taxpayer is enrolled with a tax practitioner).


KIWISAVER

KiwiSaver is a workplace savings scheme designed to help New Zealanders save for their retirement. It is primarily aimed at employees but all New Zealand residents under the age of 65 may join a KiwiSaver scheme. All eligible employees starting a new job after 1 July 2021 will be automatically enrolled in a KiwiSaver scheme and must opt out if they do not want to be part of the scheme.

Employees contribute either 2%, 4% or 8% of their gross earnings. From 1 April 2009, employers are required to contribute to their employee's Kiwisaver account at the minimum of 2% of the employee's gross salary or wage.


ACCIDENT COMPENSATION LEVIES

All employees must pay an ACC earner's levy to cover the cost of non-work related injuries. Earner's levy is charged at a flat rate which may vary for each year. For the 2008/9 income year, the rate of ACC earner's levy is $1.40 per $100 for any earnings up to $102,922. For the 2009/10 income year, the rate is $1.70 per $100 for any earnings up to $106,473. For employees, the levies are collected by the employers and paid to the Inland Revenue Department as part of the PAYE payments.

Employers are liable to pay a residual claims levy. Self-employed persons pay a selfemployed work levy and the earner levy. The residual claims levy rate is determined by the type of activity carried on by the self-employed person.


Capital gains - There is no capital gains tax in New Zealand. However, certain gains arising from the disposal of personal property that are related to a person's business and property bought with the intention of resale will be taxable. Gains on the sale and transfer of land may be taxable in certain circumstances.

Deductions and allowances - Wage/salary earners are generally not permitted to claim deductions against employment income. Some rebates of tax may be claimed back (charitable gifts and childcare). For members of partnerships and sole traders not registered as companies (i.e. the selfemployed) the same deductions apply as for corporate tax, except that fringe benefit tax does not apply to benefits provided to the proprietor and the costs of providing the benefits are unlikely to be deductible. The accident insurance employee premium is tax deductible.


Other taxes on individuals:

Capital acquisitions tax - A gift duty is levied on the donor on gifted assets worth more than NZD 27,000 in a 12 month period and a gift statement must be filed once the value of gifted assets in any 12-month period reaches NZD 12,000. Parliament is currently reviewing whether or not to repeal the gift duty.

Capital duty - No
Stamp duty - No
Real property tax - No
Inheritance/estate tax - No
Net wealth/net worth tax - No
New Zealand Tax year - New Zealand tax year runs from 1 April to 31 March



 

New Zealand Corporate Taxation

New Zealand corporate tax rate is a flat 30%, which also applies to branches. Corporate tax rate is decreasing to 28% as from 2012 income year.

Income tax is payable by New Zealand resident companies on non-exempt income derived from all sources. Non-resident companies are required to pay tax on income sourced in New Zealand.

Resident companies are companies that are incorporated in New Zealand, or have their head office or centre of management in New Zealand, or control of the company is exercised by the directors in New Zealand.

The tax year usually runs from 1 April to 31 March, although different balance dates are available in certain circumstances. Tax is payable in three instalments (referred to as 'provisional tax') if a company's residual income tax (total tax less available credits) exceeds $2,500 per annum.

Provisional tax is payable in three instalments on 28 August, 15 January and 7 May for 31 March balance dates. For taxpayers with a non-standard balance date, provisional tax is generally payable on the 28th day of the fifth, ninth and 13th months of the income year following the month of balance date. Exceptions to this arise for those on July balance dates due to public holidays and where the taxpayer has commenced business during the income year. Income tax returns must be filed with the Inland Revenue Department within four months of balance date or by 31 March of the following year where the company is enrolled with a tax practitioner that has an extension of time arrangement.


PARTNERSHIPS

General partnerships are not separate legal entities. This means that they have no existence separate from the individual partners that comprise them. Individual partners must return their share of the partnership income in their individual income tax returns. Limited partnership structures were introduced in 2008. Limited partnerships have both separate legal status and flow through tax treatment.


TRUST

Taxation of trusts is based on the tax residence of the settlor. In general terms, distributions to beneficiaries of resident trusts are taxed at beneficiaries' marginal tax rates, provided that distributions are made in the income year or within six months after the end of the income year. In contrast, distributions made to beneficiaries of foreign trusts are classified as "taxable distributions", which will be taxed at beneficiaries' marginal tax rates regardless of the distribution date. Trustee income is taxed at the flat rate of 33%. The trust regime does not apply to unit trusts. Unit trusts are deemed to be companies and are taxed accordingly.


CAPITAL GAINS TAX

There is no comprehensive capital gains tax in New Zealand. However, where a capital asset was bought for the clear purpose of resale, any profits or gains will be regarded as ordinary income.


BRANCH PROFITS TAX

There is no branch profits tax in New Zealand. New Zealand branches of foreign companies are taxed on New Zealand-sourced income only at the corporate tax rate.


FRINGE BENEFITS TAX (FBT)

FBT is payable by employers on benefits provided to employees. The rate is up to 61% of the taxable value of the benefit provided, effective from 1 April 2009. The FBT year runs from 1 April to 31 March. FBT is payable and returns must generally be filed by the 20th day of the month following the quarters ending 30 June, 30 September, 31 December and 31 March.


KIWISAVER

KiwiSaver is a workplace savings scheme designed to help New Zealanders save for their retirement. It is primarily aimed at employees but all New Zealand residents under the age of 65 may join a KiwiSaver scheme. All eligible employees starting a new job after 1 July 2021 will be automatically enrolled in a KiwiSaver scheme and must opt out if they do not want to be part of the scheme.

Employees contribute either 2%, 4% or 8% of their gross earnings. From 1 April 2009, employers are required to contribute to their employee's Kiwisaver account at the minimum of 2% of the employee's gross salary or wage.


OTHER TAXES

Gift duty may apply to transfers of property for less than market value, unless a specific gift duty exemption applies. Other taxes include customs and excise duty.



DETERMINATION OF TAXABLE INCOME

Taxable income is determined by ascertaining gross income less all allowable deductions. Generally, to be deductible, expenses and losses must relate directly to the derivation of gross income. Certain expenditure is specifically non-deductible and special rules apply in respect of the categories listed below.


DEPRECIATION

Depreciation rates are set by the Inland Revenue. Application can be made for a special rate.

Straight-line or diminishing-value depreciation methods can be used for each particular asset. Assets acquired on or after 19 May 2022 and which cost less than $500 can be expensed immediately.


RESEARCH AND DEVELOPMENT (R&D) TAX DEDUCTIONS

For the 2008/2009 tax year only, R&D tax credits are available at a rate of 15% subject to the expenditure meeting certain specified criteria.

Taxpayers are allowed to allocate certain R&D tax deductions to tax years arising after the year in which the related expenditure is incurred. This means that deductions will not be lost if there is a shareholding change between when the expenditure is incurred and when the deduction is recognised by the taxpayer.


STOCK/INVENTORY

Trading stock is generally valued in accordance with accounting principles. Livestock is valued under specified schemes. Shares must be valued at cost.


CAPITAL GAINS AND LOSSES

Capital gains and losses on disposal of assets are neither assessable nor deductible. The disposal of depreciable assets will involve tax adjustments where there is a loss on sale or depreciation recovered.


DIVIDENDS

Generally, dividends received by resident companies from other resident companies are taxable. Dividends will either have withholding tax at 33% or imputation credits attached up to the corporate tax rate of 30%.

While dividends received by resident companies from non-resident companies are exempt, there is a requirement (by the resident company) to deduct a foreign dividend withholding payment (FDWP). Where the shareholder has income interest in the non-resident company of 10% or more, the FDWP liability is reduced to the extent that foreign income tax has been paid on the income of the non-resident company.

Credit for overseas tax paid by a company is limited to 30% from 1 April 2008. For income years beginning on or after 1 July 2009, the FDWP rules have been repealed so most foreign dividends received by NZ companies will now be wholly exempt.

Tax on dividends received from entities with Portfolio Investor Entity (PIE) status are capped at 30% and are exempt income to the recipient if tax has been deducted at the correct rate. (Refer to comments below upon the rules for transitional residents which may also apply.)


INTEREST DEDUCTIONS

No interest deduction is allowed unless it is payable in deriving gross income or necessarily payable in carrying on a business for the purpose of deriving taxpayer's gross income. Companies (except for qualifying companies or non-resident companies (in limited circumstances)) are entitled to automatic interest deductions.

Thin capitalisation rules limit the interest deduction available to New Zealand entities controlled by a single non-resident. A deduction will be denied where (1) the New Zealand entity's debt/assets ratio exceeds the safe harbour percentage of 75% and (2) New Zealand group debt percentage exceeds 110% of the worldwide group debt percentage. Where these thresholds are breached, the interest deduction is limited to that which would have been available had total debt funding not exceeded 75%.

For income years beginning on or after 1 July 2021 there will be interest allocation rules applicable to NZ residents investing in controlled foreign companies.


LOSSES

Broadly, a company can carry forward net losses indefinitely provided a continuity of ownership (49% of minimum voting, dividend and capital rights) is maintained from the beginning of the year of the net loss, to the end of the year of carry forward.


INVESTMENT ALLOWANCES

There are no investment allowances in New Zealand.



FOREIGN SOURCED INCOME

CONTROLLED FOREIGN COMPANIES

New Zealand operates a controlled foreign company (CFC) regime to ensure that foreign-sourced income is included in the New Zealand resident's tax return, unless the CFC is resident in one of eight "grey list" countries comprising Australia, Canada, Germany, Japan, Norway, the United Kingdom, the United States and Spain.

For income years beginning on or after 1 July 2009, the grey list and conduit exemptions have been repealed. Controlled foreign companies with less than 5% attributable income (eg passive income such as rent, royalties, dividends and interest) or Controlled foreign companies that are Australian resident and subject to Australian Tax are not required to calculate CFC attributed income.

A foreign company will be regarded as a controlled foreign company where five or fewer New Zealand residents hold at least a 50% interest or have 'de facto' control.


FOREIGN INVESTMENT FUNDS

The Foreign Investment Fund regime complements the CFC regime and seeks to tax New Zealand residents on an accrual basis where the resident holds a noncontrolling interest in a foreign entity.


FOREIGN TAX RELIEF

Credits are available for the lesser of the foreign tax paid or the New Zealand tax payable on the foreign income.


CORPORATE GROUPS

Where there is a 66% (or greater) common ownership, revenue losses can be transferred by New Zealand resident companies by way of subvention payments (where a profit company makes a payment to a loss company up to the amount of that loss) or direct offset. Dividends between companies with 100% common ownership (a wholly owned group) can be exempt.

Where there is 100% common ownership, consolidated tax returns can be lodged, and revenue and capital items transferred within the group.


QUALIFYING COMPANY

A Qualifying Company regime exists whereby small closely held companies (five or fewer shareholders) which meet certain criteria may pass losses directly to shareholders. Capital dividends may also be paid effectively tax-free.


RELATED PARTY TRANSACTIONS

New Zealand has comprehensive transfer pricing and thin capitalisation rules to counter arrangements that seek to reduce the taxable income of New Zealand entities by shifting profits to related entities not resident in New Zealand.


WITHHOLDING TAXES

Withholding tax must be deducted from dividends to the extent that they are not imputed. The maximum rate is 33%. Withholding tax is also deducted from interest with limited exemptions.

Dividends, interest and royalties payments made to non-residents are subject to non-resident withholding tax (NRWT). The NRWT rate depends on whether the non-resident is a taxpayer of a country which has a double tax agreement with New Zealand. Refer to Section K below. Non-resident withholding tax can effectively be eliminated in relation to dividends that are fully imputed for taxpayers on a 15% NRWT rate. Fully imputed non-portfolio dividends (interests of more than 10%) will have a zero rate of NRWT.

Withholding tax is also deductible from payments made to non-resident contractors with exemptions available in certain circumstances.

Where interest is paid to non-associated parties, a 2% levy can apply on election instead of non-resident withholding tax (NRWT).


 

new zealand gst (Goods and Services Tax)

The standard rate of Goods and Services Tax (GST) in New Zealand is 15%.

Exports, international passenger transport and certain international services are zero-rated. Certain financial and insurance services, residential rents and the sale of a building used for residential letting for at least 5 years before sale are exempt from GST.

Goods and Services Tax (GST) is a broad-based tax applied to the total value of goods and services, whether intermediate or final, including imported goods and, in some cases, imported services.

GST is added to the price of taxable goods and services at a rate of 15%. Taxable goods and services are:
- Goods include all types of personal and real property, except money.
- Services covers everything other than goods or money, eg TV repairs, doctor's services and gardening services.
- Taxable goods and services are part of the business or taxable activity. This means you supply or receive taxable goods and services for a consideration (money, compensation, reward) but not necessarily for profit. We refer to taxable goods and services as "taxable supplies".

Taxable goods and services don't include:
- goods and services supplied by businesses that aren't registered for GST, and
- exempt supplies such as:
     . letting or renting a dwelling for use as a private home
     . interest you receive
     . donated goods and services sold by a non-profit body, and
     . certain financial services.

GST Registration - Registration is compulsory for businesses whose annual turnover exceeds NZD 60,000.

GST Filing and payment - GST returns must be filed monthly, bimonthly or every 6 months by each registered person, depending on the annual value of the supplies made. GST returns are generally due for filing on the 28th of the month following the end of the taxable period.



More about New Zealand Tax Rates

 

Go to Tax Rates Home Page

new-zealand-tax

39%tax-rates-up

30%

15%tax-rates-up

New Zealand
Income Tax Rate

New Zealand
Corporate Tax Rate

New Zealand
Sales Tax / GST Rate

Last Update:  Nov 2010

(This page may show previous year's tax rates. Always check last update time)

Albania Tax RatesALBANIA
Algeria Tax RatesALGERIA
Andorra Tax RatesANDORRA
Angola Tax RatesANGOLA
Anguilla Tax RatesANGUILLA
Antigua & Barbuda Tax RatesANTIGUA & BARBUDA
Argentina Tax RatesARGENTINA
Aruba Tax RatesARUBA
Australia Tax RatesAUSTRALIA
Austria Tax RatesAUSTRIA
Azerbaijan Tax RatesAZERBAIJAN
Bahamas Tax RatesBAHAMAS
Bahrain Tax RatesBAHRAIN
Bangladesh Tax RatesBANGLADESH
Barbados Tax RatesBARBADOS
Belarus Tax RatesBELARUS
Belgium Tax RatesBELGIUM
Belize Tax RatesBELIZE
Benin Tax RatesBENIN
Bermuda Tax RatesBERMUDA
Bosnia & Herzegovina Tax RatesBOSNIA & HERZEGOVINA
Botswana Tax RatesBOTSWANA
Brazil Tax RatesBRAZIL
British Virgin Islands Tax RatesBRITISH VIRGIN ISLANDS
Brunei Tax RatesBRUNEI
Bulgaria Tax RatesBULGARIA
Burkina Faso Tax RatesBURKINA FASO
Burma Tax RatesBURMA
Burundi Tax RatesBURUNDI
Cambodia Tax RatesCAMBODIA
Cameroon Tax RatesCAMEROON
Canada Tax RatesCANADA
Cape Verde Tax RatesCAPE VERDE
Cayman Islands Tax RatesCAYMAN ISLANDS
Central African Republic Tax RatesCENTRAL AFRICAN REP.
Chad Tax RatesCHAD
Chile Tax RatesCHILE
China Tax RatesCHINA
Colombia Tax RatesCOLOMBIA
Comoros Tax RatesCOMOROS
Democratic Republic of Congo Tax RatesCONGO, DEM. REPUBLIC
Republic of Congo Tax RatesCONGO, REPUBLIC OF
Cook Islands Tax RatesCOOK ISLANDS
Costa Rica Tax RatesCOSTA RICA
Cote d'Ivoire Tax Rates Ivory CoastCOTE D'IVOIRE
Croatia Tax RatesCROATIA
Cuba Tax RatesCUBA
Curaçao Tax Rates - Curacao Tax RatesCURAÇAO
Cyprus Tax RatesCYPRUS
Czech Republic Tax RatesCZECH REPUBLIC
Denmark Tax RatesDENMARK
Djibouti Tax RatesDJIBOUTI
Dominica Tax RatesDOMINICA
Dominican Republic Tax RatesDOMINICAN REPUBLIC
Ecuador Tax RatesECUADOR
Egypt Tax RatesEGYPT
El Salvador Tax RatesEL SALVADOR
Equatorial Guinea Tax RatesEQUATORIAL GUINEA
Estonia Tax RatesESTONIA
Fiji Tax RatesFIJI
Finland Tax RatesFINLAND
France Tax RatesFRANCE
French Polynesia Tax RatesFRENCH POLYNESIA
Gambia Tax RatesGAMBIA
Georgia Tax RatesGEORGIA
Germany Tax RatesGERMANY
Ghana Tax RatesGHANA
Gibraltar Tax RatesGIBRALTAR
Greece Tax RatesGREECE
Grenada Tax RatesGRENADA
Guatemala Tax RatesGUATEMALA
Guernsey Tax RatesGUERNSEY
Guyana Tax RatesGUYANA
Honduras Tax RatesHONDURAS
Hong Kong Tax RatesHONG KONG
Hungary Tax RatesHUNGARY
Iceland Tax RatesICELAND
India Tax RatesINDIA
Indonesia Tax RatesINDONESIA
Iran Tax RatesIRAN
Ireland Tax RatesIRELAND
Isle of Man Tax RatesISLE OF MAN
Israel Tax RatesISRAEL
Italy Tax RatesITALY
Ivory Coast Tax RatesIVORY COAST
Jamaica Tax RatesJAMAICA
Japan Tax RatesJAPAN
Jersey Tax RatesJERSEY
Jordan Tax RatesJORDAN
Kazakhstan Tax RatesKAZAKHSTAN
Kenya Tax RatesKENYA
Kuwait Tax RatesKUWAIT
Latvia Tax RatesLATVIA
Lebanon Tax RatesLEBANON
LibyaLIBYA
Lithuania Tax RatesLITHUANIA
Luxembourg Tax RatesLUXEMBOURG
Macau Tax RatesMACAU
Madagascar Tax RatesMADAGASCAR
Madeira Tax RatesMADEIRA
Malawi Tax RatesMALAWI
Malaysia Tax RatesMALAYSIA
Maldives Tax RatesMALDIVES
Malta Tax RatesMALTA
Mauritius Tax RatesMAURITIUS
Mexico Tax RatesMEXICO
Moldova Tax RatesMOLDOVA
Monaco Tax RatesMONACO
Montenegro Tax RatesMONTENEGRO
Morocco Tax RatesMOROCCO
Mozambique Tax RatesMOZAMBIQUE
Myanmar Tax RatesMYANMAR
Namibia Tax RatesNAMIBIA
Nepal Tax RatesNEPAL
Netherlands Tax RatesNETHERLANDS
Netherlands Antilles Tax RatesNETHERLANDS ANTILLES
New Zealand Tax RatesNEW ZEALAND
Nicaragua Tax RatesNICARAGUA
Nigeria Tax RatesNIGERIA
Norway Tax RatesNORWAY
Oman Tax RatesOMAN
Pakistan Tax RatesPAKISTAN
Palestine Tax RatesPALESTINE
Panama Tax RatesPANAMA
Papua New Guinea Tax RatesPAPUA NEW GUINEA
Paraguay Tax RatesPARAGUAY
Peru Tax RatesPERU
Philippines Tax RatesPHILIPPINES
Poland Tax RatesPOLAND
Portugal Tax RatesPORTUGAL
Puerto Rico Tax RatesPUERTO RICO
Qatar Tax RatesQATAR
Romania Tax RatesROMANIA
Russia Tax RatesRUSSIA
Rwanda Tax RatesRWANDA
Saudi Arabia Tax RatesSAUDI ARABIA
Senegal Tax RatesSENEGAL
Serbia Tax RatesSERBIA
Sierra Leone Tax RatesSIERRA LEONE
Singapore Tax RatesSINGAPORE
Slovakia Tax RatesSLOVAKIA
Slovenia Tax RatesSLOVENIA
South Africa Tax RatesSOUTH AFRICA
South Korea Tax RatesSOUTH KOREA
Spain Tax RatesSPAIN
Sri Lanka Tax RatesSRI LANKA
Swaziland Tax RatesSWAZILAND
Sweden Tax RatesSWEDEN
Switzerland Tax RatesSWITZERLAND
Syria Tax RatesSYRIA
Taiwan Tax RatesTAIWAN
Tanzania Tax RatesTANZANIA
Thailand Tax RatesTHAILAND
Tunisia Tax RatesTUNISIA
Turkey Tax RatesTURKEY
Turks and Caicos Tax RatesTURKS AND CAICOS
Uganda Tax RatesUGANDA
Ukraine Tax RatesUKRAINE
United Arab Emirates Tax RatesUNITED ARAB EMIRATES
UK Tax Rates United KingdomUNITED KINGDOM
US Tax Rates United StatesUNITED STATES
Uruguay Tax RatesURUGUAY
Uzbekistan Tax RatesUZBEKISTAN
Vanuatu Tax RatesVANUATU
Venezuela Tax RatesVENEZUELA
Vietnam Tax RatesVIETNAM
West Bank Tax RatesWEST BANK
Yemen Tax RatesYEMEN
Zambia Tax RatesZAMBIA
Zimbabwe Tax RatesZIMBABWE

Tax Rates
Tax Rates
Global Average Tax Rates
Historical Tax Rates
Tax News
Tax Videos
Tax Articles
IRS Tax Forms
Tax

© 2009-2012 TaxRates.cc
2011 - 2012 Tax Rate Guide and Tax Help Website

Tax