New Zealand Accounting & Tax Glossary

New Zealand companies pay a flat 28% corporate income tax rate on net taxable income. Maori authorities pay 17.5%. The imputation system prevents double taxation by attaching tax credits to dividends paid to shareholders.

IRD prescribes specific depreciation rates for tax-deductible assets. Two methods are available: diminishing value (DV, rate approximately 1.5x the straight-line equivalent) and straight-line (SL). Assets costing NZD 1,000 or less can be written off immediately. Buildings have been depreciated at 0% since 2011 (with limited exceptions).

FBT is paid by employers on non-cash benefits provided to employees, such as company vehicles for private use, low-interest loans, and employer contributions to insurance. FBT rates reach 63.93% on attributed benefits for employees paying the 39% top income tax rate.

New Zealand GST is a 15% consumption tax on most goods, services and other supplies. Businesses with taxable turnover exceeding NZD 60,000 in any 12-month period must register. Two-monthly returns are due by the 28th of the following month.

Imputation credits represent the company tax already paid on profits before they are distributed as dividends. Shareholders receive the credit and offset it against their personal tax, preventing the same income from being taxed at both company and personal level.

Provisional tax is income tax paid in instalments during the year rather than all at once after filing. The standard method sets each instalment at one-third of 105% of the prior year's residual income tax. Three instalments fall due on 28 August, 15 January and 7 May.

New Zealand does not have a general capital gains tax, but the bright-line test taxes gains on residential property sold within 2 years of acquisition as ordinary income. RLWT (5% to 33% depending on gain) must be withheld by the purchaser when the vendor is an offshore person.

The IR4 is the annual income tax return filed by New Zealand companies. It reconciles accounting profit to taxable income by adjusting for non-deductible items and IRD depreciation differences. Due 7 July for standard 31 March balance date companies, or 31 March following year via a tax agent.

An IRD number is the 8 or 9-digit tax identification number issued by Inland Revenue to individuals, companies and other entities in New Zealand. It is required to pay tax, employ staff, register for GST, and open a business bank account. The NZBN (NZ Business Number) is the separate 13-digit public business identifier.

KiwiSaver is New Zealand's voluntary workplace retirement savings scheme. Employers must contribute at least 3% of each employee's gross wages (rising to 3.5% from 1 April 2026 and 4% from 1 April 2028). Employees also contribute a minimum of 3%, with employer contributions subject to ESCT.

PAYE (Pay As You Earn) is the system under which New Zealand employers deduct income tax and ACC earners' levy from employees' wages and remit to IRD. Since April 2019, employers must file employment information within 2 working days of each payday (payday filing).

A Look-Through Company (LTC) is a special NZ company structure that elects tax transparency: the company's income, expenses, tax credits and losses flow through directly to shareholders' personal tax returns. The company itself pays no income tax. Limited to 5 look-through counted owners.