The New Zealand Tax System

New Zealand operates a self-assessment system where taxpayers are responsible for completing and filing their own tax returns if required. These are accepted on face value with random audits being carried out afterwards to ensure compliance with the tax laws.

Employees have tax deducted from their earnings as they are paid by their employers. The tax is paid to the Government under a system known as "pay as you earn" (PAYE). 

Taxpayers who derive their income from sources such as businesses, rental or investments pay tax in three instalments during the year with a fourth annual square-up payment. This is referred to as the provisional tax regime. 

The tax year runs from April 1st to March 31st of the following year. 

Tax Rates 

As of 1st April 2009, the income levels at which income tax is assessed are:

Individuals:

• Up to NZ$14,000, the rate is 12.5%
• Between NZ$14,001 and NZ$48,000, the rate is 21% 
• Between NZ$48,001 and NZ$70,000 the rate is 33%
• Over NZ$70,000 the rate is 38%  

Companies:

• All income is subject to the flat rate of 30%
   

Complying Trusts:

• Income retained by the Trust is subject to the flat rate of 33%
• Income distributed to beneficiaries (with 6 months of balance date) is taxed at the rates for the individual beneficiaries (as listed above)

This article was supplied by Broadbase International Ltd (www.broadbaseinternational.com). Information contained in this article is of a general nature and is not intended as a substitute for professional advice based on your individual circumstances. Disclosure statements are available on request and free of charge.