Verified Facts
New Zealand has a progressive tax system with tax rates ranging from 10.5% to 39% for personal income, a corporate tax rate of 28%, and a goods and services tax (GST) of 15%, with various rules and regulations in place for expats, businesses, and investors.
Tax laws change frequently. Always consult a qualified tax professional for advice specific to your situation. This is a general guide only.
Quick Facts
Tax System Overview
New Zealand has a territorial tax system, which means that tax is generally only paid on income earned from New Zealand sources, although worldwide taxation applies to residents who earn income from foreign sources. To be considered a tax resident in New Zealand, an individual must meet certain criteria, such as being present in the country for more than 183 days in a 12-month period, having a permanent home in New Zealand, or being away from New Zealand in the service of the New Zealand government. The tax system is overseen by the Inland Revenue Department (IRD), which is responsible for collecting taxes, administering tax laws, and providing guidance to taxpayers.
The tax system in New Zealand is designed to be fair and equitable, with a range of tax credits and allowances available to reduce the tax burden on individuals and families. The IRD also offers a range of tax incentives to encourage businesses to invest and grow in New Zealand. For example, the New Zealand Superannuation Fund provides a tax credit to individuals who contribute to a qualifying superannuation scheme. Additionally, the KiwiSaver scheme provides a tax credit to individuals who contribute to a qualifying KiwiSaver scheme.
Personal Income Tax
| Income Bracket (NZD) | Tax Rate |
|---|---|
| 0 - 14,000 | 10.5% |
| 14,001 - 48,000 | 17.5% |
| 48,001 - 70,000 | 30% |
| 70,001 - 180,000 | 33% |
| 180,001 and over | 39% |
| Personal income tax in New Zealand is progressive, with higher income earners paying a higher tax rate. Taxpayers are also eligible for various deductions and allowances, such as the earner levy, which reduces the tax burden on low- and middle-income earners. Tax returns must be filed by July 7th each year, and taxpayers can claim tax credits for donations to charities, home office expenses, and other eligible expenses. For example, the charitable donations tax credit provides a tax credit of 33.33% for donations to registered charities. |
Corporate & Business Tax
- The corporate tax rate in New Zealand is 28%, which applies to companies that are tax resident in New Zealand.
- Small business incentives are available, such as the Research and Development (R&D) tax credit, which provides a tax credit of 15% for eligible R&D expenditure.
- Free zones are not available in New Zealand, but businesses can take advantage of special economic zones, such as the New Zealand Trade and Enterprise (NZTE) scheme, which provides support and incentives for businesses that export goods and services.
- Registration requirements for businesses in New Zealand include registering for a New Zealand Business Number (NZBN) and obtaining a tax identification number from the IRD.
- Businesses must also comply with tax reporting requirements, such as filing annual tax returns and paying provisional tax instalments.
VAT / Sales Tax
- The standard rate of GST in New Zealand is 15%, which applies to most goods and services.
- Reduced rates of GST do not apply in New Zealand, but some exemptions are available, such as for certain financial services, education, and healthcare.
- Tourist refund schemes are available, such as the GST refund scheme, which allows international visitors to claim a refund of GST paid on certain goods and services.
- Businesses must register for GST if their annual turnover exceeds NZD 60,000, and must file GST returns on a regular basis.
For Expats & Foreign Workers
- Tax residency rules apply to expats and foreign workers, who are considered tax resident in New Zealand if they meet certain criteria, such as being present in the country for more than 183 days in a 12-month period.
- Double taxation treaties are in place with over 40 countries, which help to prevent double taxation and fiscal evasion.
- Social security agreements are in place with several countries, which allow expats and foreign workers to access social security benefits in their home country.
- Remittance rules apply to expats and foreign workers, who must declare and pay tax on income earned from foreign sources.
- Expats and foreign workers may also be eligible for tax credits and allowances, such as the foreign tax credit, which allows taxpayers to claim a credit for tax paid in another country.
- Additionally, expats and foreign workers must comply with tax reporting requirements, such as filing annual tax returns and paying provisional tax instalments.
Crypto & Investment Income
- Investment income, such as dividends and interest, is taxed as ordinary income, with tax rates ranging from 10.5% to 39%.
- Dividends are taxed at the company tax rate of 28%, but shareholders may be eligible for a dividend imputation credit, which reduces the tax burden on dividend income.
- Cryptocurrency is taxed as ordinary income, with tax rates ranging from 10.5% to 39%, and taxpayers must declare and pay tax on gains made from the sale of cryptocurrency.
- Capital gains tax is not applicable in New Zealand, but gains made from the sale of investment assets, such as shares and property, are taxed as ordinary income.