New Zealand Accounting and Tax Considerations

Tetra Consultants provides New Zealand accounting and tax service. Our accounting team will ensure your company is compliant with local regulations and requirements by timely filing annual returns and financial statements, tax compliance, audits and bookkeeping.

New Zealand accounting and tax service

Many international clients engage Tetra Consultants for New Zealand accounting and tax services. Tetra Consultants will timely complete your firm’s financial statements, corporate tax returns and manage auditors on your behalf and without the need to travel. It is important to meet the deadlines stipulated by the New Zealand Inland Revenue Department. Failure to comply will result in late penalties and fines.  Contact us now for a free consultation. Our team of experts will revert within the next 24 hours.

Annual reporting requirements

  • Typically, unless allowed by the Inland Revenue Department, a New Zealand entity fiscal financial year is from 1 April to 31 March.
  • All New Zealand businesses are required to pay a corporate income tax rate of 28% for both global and local income. The due date for filing the annual income tax returns for a company with a 31 March financial year end is 7 July.
  • For a company with different financial year end the due date to submit tax deadline will be seventh day of the fourth month after the end of the company’s corresponding income year. An extension to file tax returns may be granted to companies to companies that are registered with a tax agent.

Corporate income tax

  • Another important aspect of New Zealand accounting and tax is the corporate income tax. Generally, the New Zealand tax rule applies for all New Zealand incorporated companies including branches of foreign companies.
  • Worldwide income of a resident company is subject to tax while a non-resident company is only subject to tax for local sourced income.
  • Companies are required to settle the income tax liability in three provisional tax instalments during the year in which the income is earned. The prior year income of the tax payer will determine the amount of tax payable for the “provisional taxpayers”

GST

  • Selected good and services tax (GST) are subject to 15%.
  • An entity with sales above US$45,000 per annum, is mandatory to register for a GST number. The GST rate is 15% and you are required to file monthly returns before the 28th of the following month.

Withholding tax

  • Dividends paid to non-resident are subjected to a withholding tax rate of 30% and royalties paid to non-residents are subject to 15% Non-resident withholding tax.
  • New Zealand typically does not levy withholding tax on payments of technical service fees, unless services fall within the definition of royalties.
  • Interest paid to a non-resident are subjected to a withholding tax rate of 15%.
  • Royalties paid to a non-resident subjected to a withholding tax rate of 15%.
  • Unless a service falls under the definition of royalties, New Zealand generally does not levy withholding tax on  fees for technical services.
  • For payment of services performed physically in New Zealand by a non-resident a 15% withholding tax is generally applicable.

Other tax considerations

  • It is mandatory to pay provisional tax on 15th January, 31st March and 7th May.
  • An employer likely will be required to contribute a percentage of an employee’s gross salary or wages to the Kiwisaver superannuation scheme, for employees that have opted into the scheme. The minimum employee contribution rate is 3% of gross pay.
  • The compulsory employer contribution rate is 3% of an employee’s gross pay. There are not payroll tax.
  • Employers and intermediaries will be required to digitally file employment information.
  • In total, New Zealand has signed more than 40 Double Taxation Avoidance Agreements (DTAAs).
  • Transfer pricing rules are as per those set out in the legislation that aligns with the 2017 OECD transfer pricing guidelines. The main intention of the policy is that tax payer is able to demonstrate that its transfer pricing positions satisfy the arm’s length principle.

Contact us now to find out more about New Zealand accounting and tax obligations. Our team of experts will revert within the next 24 hours.

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