New Zealand Taxation 2012 for International investors: Dates & Rates

New Zealand 2012 fiscal year: 01 April 2011 – 31 March 2012

Corporate income tax rate

28%

Limited partnership

  • NZ tax rate on non-NZ sourced income of non-resident Limited Partner

0%

New Zealand Foreign Trust

  • NZ tax rate on non-NZ sourced income
0%

Stamp Duty

0%

Inheritance tax rate

0%

Capital Gain tax rate

0%

Gift duty

0%

Debt and equity rules

There are no debt and equity rules in New Zealand.

Tax imputation rules

Imputation is a system that allows companies pass on to their shareholders the benefit of the New Zealand income tax they have already paid. New Zealand companies can do this by “imputing” (attaching tax credits to the dividends they pay out) credits for the income tax the company has already paid.

Deduction for donations

New Zealand companies can claim tax deductions for donations to approved charitable organizations, up to the amount of their taxable income.

Depreciation

You must claim depreciation on fixed assets used in your business that have a useful lifespan of 12 months or more.

Transfer pricing

New Zealand’s transfer pricing rules are based on the “arm’s length” principle as set out in the Organisation for Economic Cooperation and Development (OECD) Model Tax Convention.

New Zealand double taxation agreements

Australia, Austria, Belgium, Canada, Chile, People’s Republic of China, Czech Republic Denmark, Finland, Fiji, France, Germany, Indonesia, India, Ireland, Italy, Japan, Korea, Malaysia, Mexico, Netherlands, Norway, Philippines, Poland, Russian Federation, Singapore, South Africa, Spain, Sweden, Switzerland, Taiwan, Thailand, United Arab Emirates, United Kingdom, United States of America

New Zealand free Trade Agreements

Australia, People’s Republic of China, Thailand, Singapore, Brunei, Chile, Malaysia, Hong Kong

Non-Resident withholding tax

  • Dividends (not imputed or credited)
30.0%
  • Cash dividends (fully imputed)
15.0%
  • Non-cash dividends (fully imputed)
0%
  • Interest
0%-15.0%
  • Royalties
15.0%

Resident withholding tax

  • Interest (IRD number provided)
10.5%-33.0%
  • Interest (no IRD number provided)
33.0%
  • Dividends
33.0%

Use of money interest rates

  • Taxpayer’s paying rate
8.91%
  • Commissioner paying rate
1.82%

Provisional tax

During the tax year your business may be liable to pay provisional tax if your residual income tax is more than NZ $2,500. The provisional tax must be paid during the year is offset against your end of year tax payable figure.

Is your company a resident in New Zealand?

The company is resident of New Zealand, if it meets any of the following criteria:

  • It is incorporated in New Zealand
  • Control by the company directors is exercised in New Zealand
  • It has its centre of management in New Zealand
  • It has its head office in New Zealand

Are you, personally, a New Zealand resident for tax purposes?

You’re a New Zealand tax resident if:

  • you are in New Zealand for more than 183 days in any 12-month period, or
  • you have an “enduring relationship” with New Zealand

Income tax rates for individuals

(not including Earner’s ACC)

up to NZD$14,000 10.5%
NZ$14,001 to $48,000 17.5%
NZ$48,001 to $70,000 30.0%

NZ $70,001 and over

33.0%

Tax exemption on foreign income for new migrants and returning New Zealanders

New tax residents in New Zealand may qualify for a temporary tax exemption for up to 49 months on some of their foreign income derived from:

  • Controlled foreign company income that is attributed under New Zealand’s Controlled Foreign Company (CFC) rules
  • Foreign investment fund income that is attributed under New Zealand’s Foreign Investment Fund (FIF) rules (including foreign superannuation)
  • Non-resident withholding tax (for example on foreign mortgages)
  • Approved issuer levy (for example on foreign mortgages)
  • Income arising from the exercise of foreign employee share options
  • Accrual income (from foreign financial arrangements)
  • Income from foreign trusts
  • Rental income derived offshore
  • Foreign dividends
  • Foreign interest
  • Royalties derived offshore
  • Income from employment performed overseas before coming to New Zealand, such as bonus payments
  • Gains on sale of property derived offshore (held on revenue account)
  • Offshore business income (that is not related to the performance of services).
March 23rd, 2011