Tax laws New Zealand
New Zealand's taxation system is administered by the Inland Revenue Department (IRD) and encompasses various taxes, including personal and corporate income taxes, goods and services tax (GST), and levies for specific purposes.
1. Personal Income Tax:
New Zealand residents are taxed on their worldwide income, while non-residents are taxed only on income derived from New Zealand sources. The income tax rates for the 2021–2024 tax years (1 April to 31 March) are as follows:
- $0 – $14,000: 10.5%
- $14,001 – $48,000: 17.5%
- $48,001 – $70,000: 30%
- $70,001 – $180,000: 33%
- Above $180,000: 39%
These rates apply progressively, meaning each portion of income is taxed at the corresponding rate.
2. Corporate Income Tax:
The corporate income tax rate in New Zealand is 28%. Companies are taxed on their worldwide income, with certain deductions and credits available to reduce taxable income.
3. Goods and Services Tax (GST):
GST is a value-added tax applied to most goods and services sold in New Zealand. The standard GST rate is 15%. Businesses with annual turnover exceeding $60,000 are required to register for GST.
4. Accident Compensation Corporation (ACC) Earners' Levy:
All employees contribute to the ACC, which provides no-fault personal injury coverage. The earner's levy is calculated at a rate of 1.46% for the 2022–2023 tax year, applied to income up to $130,911. Employers also contribute to the ACC, with rates varying depending on the industry and level of risk.
5. Property Transactions:
New Zealand does not have a comprehensive capital gains tax. However, profits from property sales may be taxed under the "bright-line test," which was extended to 10 years in 2021. This test applies to residential properties purchased and sold within this period, excluding the family home, inherited properties, and certain other exemptions.
6. Recent Developments:
In September 2024, New Zealand increased the International Visitor Conservation and Tourism Levy (IVL) from NZ$35 to NZ$100. This hike aims to fund infrastructure maintenance and conservation efforts impacted by tourism. The fee applies to most international visitors, with exceptions for New Zealand and Australian citizens, as well as citizens from certain Pacific Island nations.
7. Tax Administration:
The IRD oversees tax collection and compliance. Individuals and businesses can access tax information, file returns, and manage payments through the IRD's online services.
Note: Tax laws and regulations are subject to change. For the most current information, it is advisable to consult the Inland Revenue Department or seek professional tax advice.
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