New Zealand Taxation
One of the world's most competitive tax systems.
The New Zealand tax system
Regarding the tax system of New Zealand, simplicity is of utmost importance. It is predictable, fair, and competitive in terms of both earnings and assets, rendering New Zealand an attractive country to reside and invest in.
No taxes on…
Exempt from taxation are the following
- Inheritance tax
- Capital gains tax in general, while it may also apply to some particular assets./li>
- Other than the property rates imposed by local councils and authorities, local or state taxes
- Payroll
- Social security
- Health insurance, with the exception of a very small fee for new zealand's "accident compensation injury insurance plan"
Which items are subject to taxation in New Zealand?
The most prevalent tax in New Zealand is the Goods and Services Tax (GST), which is applicable to consumer goods. It is levied at 15% and used to fund services for citizens. However, it does not apply to residential rents and financial services. Additionally, businesses can recover the GST they pay.
As for personal income tax, income over NZ$70,000 is subject to the top rate of 33%, whereas income up to $14,000 is taxed at a rate of 10.5%.
For companies and corporations, there is a flat tax rate of 28%.
Will I be subject to double taxation if I relocate to New Zealand?
If you are eligible for 'transitional tax resident' status, income from overseas investments or pensions may be exempt from New Zealand tax for your first four years of living here. This provides a significant incentive to move.
Refer to the IRD website for information on tax exemption.
In the event that you are taxed by your country of origin after relocating to New Zealand, you may be eligible for tax credits for the portion of your income that is subject to taxation in both New Zealand and your home country. Furthermore, international agreements exist to prevent businesses from being subject to double taxation.
Refer to the IRD website for information on Double Tax Agreements (DTAs).
| Personal income | 33% from $70,000 30%: $48,001 to $70,000 17.5%: $14,001 to $48,000 10.5%: $0 to $14,000 |
| Company income | 28% |
| Tax credits | Working for Families tax credits to assist individuals with low to moderate income. |
| Estate tax | None. |
| Capital gains | Capital gains: This generally pertains to foreign equity and debt investments and not specifically to New Zealand investments. |
| Dividends | The imputation system is in place to prevent double taxation. |
| Gift duty | Not since 2011. |
| Tax on savings | Although saving for retirement is optional, contributions to New Zealand retirement schemes receive minimal tax relief. Income tax is withheld at regular rates, while distributions are exempt from taxation. The only mortgage interest tax benefits available are for investment properties. |
| Fringe benefit tax | Employers may provide benefits such as company cars, low-interest loans, medical insurance premiums, and contributions to foreign superannuation, which are subject to Fringe Benefit Tax (FBT) at a rate of up to 49.25%. The FBT paid is tax-deductible for the employer, making the cost equivalent to paying cash remuneration. |
| Sales & excise tax | Most goods and services are subject to a 15% Goods and Services Tax (GST). In addition, excise taxes are levied on petrol, tobacco, and alcohol. |