Last updated: 20 Jan 2012

Taxation

Australia and New Zealand have many common standards and regulations or mutual recognition of them. With few exceptions, imports are subject to the 15 per cent Goods and Services Tax (GST). This is payable at the time of entry into New Zealand. Duty assessment is based on free on board (FOB) value, country of origin and classification of goods.

The New Zealand taxation system is different from Australia and companies should seek professional advice before setting up a business presence there. Useful information may be found on the New Zealand Inland Revenue Department website.

A summary of taxation that may be applicable to Australian companies is as follows:

• The company tax rate is 33 per cent and is payable by New Zealand resident companies on non-exempt income derived from all sources and non-resident companies on income sourced 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 where a company’s residual income tax exceeds NZ$2,500 pa (A$2,140 pa).
• Fringe benefits tax is payable by employers on specified benefits provided to their employees.  The rate is 64 per cent or less on the taxable value of each benefit provided. The level will depend on the benefit and income.
• Goods and services tax (GST) of 15 per cent is levied on all goods. The GST on imports is initially assessed on the CIF value (Incoterms 1990) plus any duty.
• Withholding tax must be deducted from dividends to the extent that they are not franked. The maximum rate is 33 per cent. Withholding tax is also deducted from interest at maximum 33 per cent with limited exemptions. Non-resident withholding tax is deducted from interest, dividends and royalties paid to non-residents.
• There is no capital gains tax in New Zealand. Where a capital asset was bought for the purpose of resale, any profits or gains are included with other taxable company income.
• There is no branch profits tax in New Zealand.
• There is no sales tax in New Zealand, although there are levies on sales of certain products, (alcohol, tobacco, fuel). A consumption tax of 15 per cent (GST) is charged on most goods and services in New Zealand, the exceptions being certain financial services and goods and services exported from New Zealand.
• Regulations relating to Stamp Duty have been repealed and it is no longer payable on transfers of property or on share transfers.
• Other taxes include customs and excise duty (for example, on alcohol, tobacco products, fuels and motor vehicles).

Top Business Risks

• Bribery of Foreign Officials
• Tariffs and regulations
• Doing business in New Zealand

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