1. Basis of Taxation
New Zealand’s income year runs from 1 April to 31 March [1]. New Zealand residents are taxed on their worldwide income whereas non residents are taxed on their New Zealand sourced income.
2. Corporate Tax
- The New Zealand corporate tax rate is 30% from 1 April 2008 (reduced from 33%) for companies with a standard year-end of 31 March. For companies with an approved 31 December year-end the 30% rate will first apply to their income year ending 31 December 2008.
- No capital gains tax is levied in New Zealand. However, residents may be taxed on capital gains derived from certain types of financial arrangements and from certain real and personal property transactions. These gains are subject to tax at the standard corporate tax rate.
3. Withholding tax rate (non-treaty)
|
Resident |
Non-resident Individual/Corporation |
Dividends |
33% [2] |
30% [3] |
Interest |
19.5% [4] |
15% [5] |
Royalties/know-how |
Nil |
15% [6] |
Rents (for moveable property) |
Nil |
Nil [7] |
Management fees |
Nil |
Nil [8] |
Technical fees |
Nil [9] |
Nil [10] |
Directors’fees |
33% |
33% |
4. Residential and non-resident individual [11] income tax rates from 1 October 2008 to 31 March 2009
Taxable Income ($) |
Tax Rate |
$0-$14,000 |
12.5% |
$14,001 - $40,000 |
21% |
$40,001 - $70,000 |
33% |
$70,001 + |
39% |
5. Non-residential individual tax rates
Income tax rates set out in table above. Note non-resident contractors are taxed at 15% and non-resident entertainers at 20% subject to certain exemptions. [12]
6. Goods and Services tax (GST)
- GST is a broad based tax levied on the supply of goods and services and imports at the rate of 12.5% (and also 0% on certain goods and services).
- The registration threshold is $40,000.
- A person is liable to register if, in the course of all taxable activities:
- at the end of any month, the value of supplies made in New Zealand during that month and the preceding 11 months exceeds the registration threshold; or
- at the commencement of any month, there are reasonable grounds for believing that the value of supplies made in New Zealand during that month and the following 11 months will exceed the threshold.
7. Estate duty
- Estate duty was abolished with effect from 17 December 1992.
- Gift duty is imposed on dutiable gifts made within a 12-month period. The rate of duty varies according to the value of the gift. (see table below). Actual liability for gift duty is determined according to the concepts of domicile and situation of property. There are a number of exemptions for certain kinds of gifts.
Value of gift ($) |
Rate |
up to $27,000 |
Nil |
$27,001 - $36,000 |
5% on excess over $27,000 |
$36,001 - $54,000 |
$450 plus 10% on excess over $36,000 |
$54,001 - $72,000
$72,001 + |
$2,250 plus 20% on excess over $54,000
$5,850 plus 25% on excess over $72,000 |
8. Stamp duty
There is no stamp duty in New Zealand
9. Property tax
There are no separate property taxes in New Zealand. However, capital gains derived from certain real and personal property transactions may be taxed at the persons standard tax rates.
10. Income tax filing deadlines 2008/2009 Income year
Types of Form |
|
Deadlines [13] |
2009 Income tax return |
Residential individual |
7 July 2009 |
2009 Income tax return |
Non-residential individual |
7 July 2009 |
2009 Income tax return |
Companies |
7 July 2009 [14] |
2009 Income tax return |
Partnerships |
7 July 2009 [15] |
11. Double Tax Agreements.
- Non-resident withholding tax (NRWT) is deducted from non-resident withholding income paid to non-residents
- Non-resident withholding income is interest, dividends and royalties
NRWT is deducted at the following rates: interest (15%), dividends (30%), royalties (15%). Use these rates if the country isn’t on the chart below, the country of residence is not known or the non-resident is itinerant. These rates are reduced when the person lives in a country with which New Zealand has a double tax agreement (DTA).
The percentages are the rates of NRWT deductible from the gross income (no expenses can be deducted). The rates shown are for a full year unless otherwise stated. However, they are subject to change because the negotiation of new DTAs and the amendment of existing agreements is an ongoing process.
|
Interest or |
Interest paid to “associated persons” |
Dividends |
Royalties |
Copyright (cultural royalties) |
Australia |
10f |
10%max |
15%f |
10%max |
10%f |
Austria |
10f |
10%max |
15%f |
10%max |
10%f |
Belgium |
10%f |
10%max |
15%f |
10%max |
10%f |
Canada |
15%f |
15%max |
15%f |
15%max |
15%f |
Chile – |
10 or 15%f (refer DTA) |
15%max |
15%f |
10%max |
10%f |
China |
10%f |
10%max |
15%f |
10%max |
10%f |
Czech Rep |
10f |
10%max |
15%f |
10%max |
10%f |
Denmark |
10%f |
10%max |
15%f |
10%max |
10%f |
Fiji |
10%f |
15%min |
15%f |
15%max |
15%f |
Finland |
10%f |
10%max |
15%f |
10%max |
10%f |
France |
10%f |
10%max |
15%f |
10%max |
10%f |
Germany |
10%f |
10%max |
15%f |
10%max |
10%f |
India |
10%f |
10%max |
15%f |
10%max |
10%f |
Indonesia |
10%f |
10%max |
15%f |
15%max |
15%f |
Ireland |
10%f |
10%max |
15%f |
10%max |
10%f |
Italy |
10%f |
10%max |
15%f |
10%max |
10%f |
Japan |
15%f |
15%min |
15%f |
15%min |
15%f |
Korea, (Republic) |
10%f |
10%max |
15%f |
10%max |
10%f |
Malaysia |
15%f |
15%min |
15%f |
15%max |
15%f |
Mexico |
10f |
10%max |
15%f |
10%max |
10%f |
Netherlands |
10%f |
10%max |
15%f |
10%max |
10%f |
Norway |
10%f |
10%max |
15%f |
10%max |
10%f |
Philippines |
10%f |
15%max |
15%f |
15%max |
15%f |
Poland |
10%f |
10%max |
15%f |
10%max |
10%f |
Russian Fedaration |
10%f |
10%max |
15%f |
10%max |
10%f |
Singapore |
15%f |
15% min |
15%f |
15%max |
15%f |
Spain |
10%f |
10% max |
15%f |
10%max |
10%f |
South Africa |
10%f |
10% max |
15%f |
10%max |
10%f |
Sweden |
10%f |
10%max |
15%f |
10%max |
10%f |
Switzerland |
10%f |
10%max |
15%f |
10%max |
10%f |
Taiwan |
10%f |
10%max |
15%f |
10%max |
10%f |
Thailand |
10 or 15% f |
15%max |
15%f |
10/15%max |
10%f |
UAE |
10%f |
10%max |
15%f |
10%max |
10%f |
UK* |
10%f |
10%max |
15%f |
10%max |
10%f |
USA |
10%f |
10%max |
15%f |
10%max |
10%f |
Other |
15%f |
15%min |
30%f+ |
15%min |
15%f |
f means the percentage is the final liability. As long as the income has the correct NRWT deducted at source and it is the recipient’s only income received from New Zealand, they do not need to file a New Zealand tax return. |
min means the rate shown is a minimum rate of tax. The net income (after deducting expenses) must be included in the non-resident’s tax return, along with all other income from New Zealand. Credit is allowed for the NRWT deducted. |
max the tax on the income cannot exceed the rate shown. |
+ this reduces to 15% if fully imputed, fully dividend withholding payment credited or fully conduit tax-relief credited. |
Associated persons are: - relatives to the fourth degree of relationship |
- a partnership and any person related to the fourth degree to any partner
|
- any company and any person holding 25% or more of its paid-up capital.
|
Exception: For interest covered by DTAs with Fiji, Malaysia and Singapore, the definition of associated persons is limited to control of one party by another. This control can be direct or indirect and can be any kind of control. |
* Does not include the Isle of Man or the Channel Islands. Use the rates for “Other countries”. |
| NOTES |
 |
[1] A company with an accounting period that ends later than 31 March may apply to the Commissioner of Inland Revenue for permission to adopt an income year that corresponds with its accounting year.
[2] Unless the recipient holds an exemption cerficate. RWT on dividends is implemented in such a way as to integrate with the dividend imputation and dividend withholding payment (DWP) systems. Under those systems, a company may attach imputation credits or DWP credits to dividends at the time a dividend is paid. Where any such credits are attached to a dividend, the amount of RWT payable in respect of the dividend is reduced.
[3] Reduced to 15% for fully imputed cash dividend and for certain DTA countries. The imputation credits described in footnote 2 may be used to offset Non-resident withholding tax (NRWT) on dividends paid to non residents. The New Zealand company may pass on the benefit of such credits to non- resident investors through payments of supplementary dividends. The aim of this mechanism is to allow non-residents to claim a full tax credit in their home countries for NZ NRWT. The NZ company may also claim a partial refund or credit with respect to its own NZ company tax liability.
[4] The 19.5 rate applies to individuals only. The rate is increased to 39% if the recipient’s tax file number is not supplied. Recipients may elect to have 33% or 39% tax withheld from interest paid.
[5] Final tax where recipient not associated with payer and reduced to 10% for certain treaty countries.
[6] Final tax on royalties relating to literary,dramatic, musical or artistic works. For other royalties this is a minimum tax. Reduced to 10% for certain treaty countries.
[7] May be taxed under DTA and also may give rise to permanent establishment issues.
[8] Management fees may be subject to further transfer pricing rules.
[9] Unless the fess are for a specified activity set out in schedule 4 to the Income Tax Act 2007.
[10] Ibid. Also technical fees may be subject to further transfer pricing rules.
[11] Note non-residents are only liable for their NZ sourced income.
[12] For example relief from tax under a treaty for non-resident contractors who are present in NZ for less than 92 days in any 12 month period.
[13]
Note filing dates may be extended or varied where returns lodged by a tax agent
[14]
7th day of the 4th month after the person’s corresponding income year for any person with a late balance date (i.e. 1 April to 30 Septermber).
[15]
Ibid |
|
