New Zealand Accounting Questions Answered

What is the company tax rate in New Zealand?

New Zealand companies pay a flat 28% corporate income tax rate on net profits. Special vehicles like PIE funds, look-through companies (LTCs), and qualifying companies are taxed differently. The imputation system prevents double taxation on dividends.

Who needs to file an IR3 income tax return in New Zealand?

You must file an IR3 if you are self-employed, earn rental income, have income not taxed at source, or have a residual income tax liability over NZD 5,000. The standard due date is 7 July following the tax year end on 31 March.

How does provisional tax work in New Zealand?

Provisional tax is New Zealand's system for paying income tax in advance instalments during the year. You become a provisional taxpayer when your residual income tax exceeds NZD 5,000. Payments are made in three instalments based on the previous year's liability (standard method) or your estimate of current-year income.

When do I need to register for GST in New Zealand?

You must register for GST if your taxable turnover exceeds or is expected to exceed NZD 60,000 in any 12-month period. Registration is voluntary below this threshold. Once registered, you charge 15% GST on most supplies and file regular GST returns.

How do I file a GST return in New Zealand?

GST returns are filed online through IRD's myIR portal by the 28th of the month following the end of the GST period (monthly, two-monthly, or six-monthly). You report total sales (output tax at 15%), deduct GST paid on purchases (input tax), and pay or receive the difference.

How does the bright-line test work for property in New Zealand?

New Zealand's bright-line test taxes capital gains on residential property sold within 10 years of purchase (or 2 years for new builds acquired after 27 March 2021). Gains are taxed as ordinary income. The main home exclusion, inherited property, and relationship property transfers are key exceptions.

How does the New Zealand R&D tax credit work?

New Zealand businesses can claim a 15% tax credit on eligible R&D expenditure. The minimum annual threshold is NZD 50,000 in eligible R&D spend. The credit reduces your income tax payable. Eligible activities must be systematic, experimental, and aimed at creating new knowledge.

How does a shareholder-employee salary work in New Zealand?

A shareholder-employee can pay themselves a salary from their company, which is deductible for company tax and subject to PAYE. This differs from dividends, which are paid from after-tax profits. The optimal split between salary and dividends depends on the shareholder's personal tax rate and the company's imputation credit position.

What business expenses can I deduct in New Zealand?

New Zealand businesses can deduct most expenses incurred wholly or partly for earning business income. Key rules: meals and entertainment are 50% deductible, home office requires floor area apportionment, vehicles need a logbook or 25% private-use adjustment, and mixed-use assets must be apportioned based on actual use.

What are an employer's PAYE and KiwiSaver obligations in New Zealand?

New Zealand employers must deduct PAYE (income tax) from employee wages on each payday, file an employment information return within 2 working days, contribute a minimum 3% to KiwiSaver (rising to 3.5% from 1 April 2026), and deduct employer superannuation contribution tax (ESCT) on that contribution.