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Corporate Tax in New Zealand

Updated on Thursday 17th January 2019

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Corporate-Tax-in-New-ZealandOne of the most important reasons for foreign investors to open companies in New Zealand is the taxation system. At the end of the ‘80ies, the New Zealand government enabled a simplified taxation system for companies which implies applying the corporate tax for the worldwide incomes earned by local companies and various tax exemptions and reductions for foreign companies with activities in New Zealand in accordance with the double tax agreements the central authorities have signed.

Below, our company formation consultants in New Zealand will explain how the taxation of companies occurs in this country. We also specialize in offering business registration solutions in New Zealand.

How is the corporate tax calculated in New Zealand?

The New Zealand corporate tax is applied based on the tax residency of a company. This means that in order to be applied the corporate tax, a company must have a place of management or the head office in New Zealand. Companies which do not fulfill any of these requirements will be treated as a non-resident company and will be levied the corporate tax on the income earned in New Zealand. When it comes to the computation of the corporate tax, all companies will be treated the same which means applying the tax at a 28% rate. This rate is flat.

It should be noted that same tax rate is applied to branch offices of foreign companies operating in New Zealand.

In order to be considered tax residents, New Zealand companies must first obtain tax identification numbers, known as IRDs, by registering with the authorities. The Inland Revenue in New Zealand handles this procedure.

Corporate tax returns in New Zealand

In order to be levied the corporate tax, a New Zealand company is required to file tax returns which establish the amount of money which will be taxed. In order to do that, the company representatives are required to file annual tax returns which indicate the income earned by the business during the financial year.

The corporate tax returns must be filed according to the following calendar:

  • -          the fiscal year ends on March 31st for the previous year in which the income was generated;
  • -          the tax returns must be filed by July 7th for the balance sheets registered between October 1st and March 31st;
  • -          for the period of April 1st and September 30th, the tax returns must be filed by the 7th day of the fourth month;
  • -          the tax must be paid based on the period for which the corporate tax returns were filed;
  • -          it is possible for New Zealand companies to appoint an agent to file their tax returns.

It is also possible for New Zealand companies to pay a provisional corporate tax which implies filing specific tax returns.

Our company registration specialists in New Zealand can offer more information about the corporate tax and can help business owners register their companies with the Inland Revenue.

Other taxes to be paid by companies in New Zealand

Corporate taxation in New Zealand does not imply only the levy of the business income tax, but also other taxes. Among these the Goods and Services Tax (GST) which is the equivalent of the value added tax in European countries.

Companies are imposed with the GST on the services and products they sell in New Zealand. The standard rate of the GST in New Zealand is 15%. New Zealand companies can claim the GST by filing tax returns for this purpose.

An important aspect to be considered about the corporate tax in New Zealand is the taxation of dividends paid by such company. In New Zealand, shareholders are imposed with the dividend tax, however, the authorities here provide for tax exemptions for such payments to the extent of the corporate tax paid by the company.

New Zealand does not impose any capital gains tax. Our local advisors can offer more information on the taxes a New Zealand company must pay.

Accounting services in New Zealand

If you plan on opening a company in New Zealand, you should consider asking for support related to accounting matters. Our New Zealand company formation agents work with a team of accountants which can support with the financial matters of your company.

We can assist with the tax and GST registration procedures with the Inland Revenue and with the preparation and filing of the monthly, quarterly and annual tax returns and other financial documents. We can also assist with audit services where the law requires it.

Do not hesitate to contact us for full information on the taxation of companies in New Zealand. With a vast experience in offering company registration services in New Zealand, our representatives can guide you in choosing the right type of structure for your local business.

 

Meet us in Wellington


Call us now at +44 203 287 0408  to set up an appointment with our business consultants in Wellington, New Zealand. Alternatively you can incorporate your company without traveling to New Zealand.

As a BridgeWest client, you will benefit from the joint expertize of local lawyers and international consultants. Together we will be able to offer you the specialized help you require for your business start-up in New Zealand.

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