Business Environment

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In this page: Accounting Rules | Tax Rates | Intellectual Property | Legal Framework | Standards | Business Practices

 

Accounting Rules

Tax Year
From 1 April to 31 March. Alternative balance sheet dates are generally allowed by the Inland Revenue Department upon application.
Accounting Standards
For the full list of approved standards please access the Institute of Chartered Accountants' website.
Accounting Regulation Bodies
Audit New Zealand
Accounting Standards Review Board (ASRB)
Accounting Reports
The accounting structure is described in the GAAP (Generally Accepted Accounting Practice) on the New Zealand Treasury website. The annual report has to include a balance sheet, a profit and loss account and a cash flow statement.
Publication Requirements
The "Financial Reporting Act" of 1993 forces any organization to produce an annual report of the financial flows within the 5 months preceding the end of the accounting year, before disclosure to the "Registrar of Companies" for agreement. Only companies quoted in the stock exchange have to publish their accounts. According to the law of transferable securities and the law of exchange, registrants must file to the Ministry of Finance the annual and biannual statement reports, as well as a copy in the foreign exchange markets where transferable securities are registered.
Professional Accountancy Bodies
CA ANZ , Institute of Chartered Accountants of New Zealand
Certification and Auditing
The control of accounts must be made by a company certified by the CA ANZ and recognized as a "Chartered Accountant". The NZ Institute of Chartered accountants is New Zealand's only professional accounting body. It has three membership groupings: chartered accountants, associate chartered accountants, and accounting technicians.
Accounting News

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Tax Rates

Consumption Taxes

Nature of the Tax
Good and Services Tax (GST)
Tax Rate
15%
Reduced Tax Rate
Supplies of accommodation and other domestic goods and services in a rest home where nursing care and other services are provided, and supplies of long-term accommodation in a hotel or motel are subject to a reduced rate of 9%.
Zero-rated items include exports of goods and services; international passenger transport; certain international services; first sales of refined precious metals for investment purposes; supplies of financial services to businesses that make taxable supplies in excess of 75% of total supplies where the supplier has elected to do so; certain transactions involving emissions units; exported secondhand goods if the recipient gives the supplier an undertaking in writing that the goods will not be reimported into New Zealand; certain supplies of which land is a component by GST-registered vendors to registered persons; supplies of remote services made by nonresident suppliers to GST-registered New Zealand customers, where the supplier chooses to zero-rate.
Exempt items include financial services (although some qualify for the zero rate); sales of donated goods by non-profit organizations; certain real estate transactions; supply of precious metal.
Other Consumption Taxes
Excise duty is levied on petroleum products, fuels (e.g. compressed natural gas, gasoline), tobacco, and alcohol.
Diesel vehicles are subject to road user charges according to the type of vehicle and its weight.

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Corporate Taxes

Company Tax
28%
Tax Rate For Foreign Companies
New Zealand resident companies are taxed on their worldwide income, and non-resident companies (including branches) are taxed on their New Zealand-sourced income.
A company is deemed to be resident in the country if its place of incorporation, location of head office, centre of management, or directors exercising control of the company are in New Zealand.

A non-resident contractor’s tax (NRCT) applies to contract payments to non-residents in relation to certain contract activities undertaken in New Zealand, at a rate of 15% (or 45% for individuals and 20% for companies if the relevant documents are not provided).

Capital Gains Taxation
Capital gains are generally not taxed in New Zealand. Certain property transactions are taxable, such as the sale of residential property within five years of purchase (with an exception for a family home), as well as the sale of personal property purchased with the intention of resale.
Main Allowable Deductions and Tax Credits
Expenses incurred for the purpose of generating income are generally deductible. On the other hand, start-up costs and goodwill are not deductible for tax purposes.

Interest charges and bad debts (for the year in which non-recoverable debts are eliminated) are tax-deductible. Donations to charities approved by the New Zealand tax authorities are eligible for a tax deduction, capped at the net income of the company in a given tax year. Legal fees are deductible if they are paid in order to generate taxable income or to carry on an activity whose objective is to generate taxable income. These fees are not deductible when they are of a capital nature. Entertainment expenses are deductible up to 50% (100% for costs incurred abroad). The benefits tax is also tax-deductible, as well as R&D expenses.

Tax losses can be carried forward as long as the company maintains a minimum of 49% participation on a continuous basis. The carryback of losses is prohibited; however, following the COVID-19 pandemic, a temporary loss carryback is available for businesses that have incurred a loss in the 2019-20 income tax year or that anticipate being in a loss position in the 2020-21 income tax year.
Other Corporate Taxes
The New Zealand tax system does not impose any stamp or capital duty while the levy of property tax is made at variable rates depending on the region. In contrast, all employers are required to pay a fringe benefits tax at a rate between 49.25% and 63.93%.
The Tax Code does not explicitly provide for a social security tax (the latter being financed by all taxes), yet employers are required to contribute when the employee decides to register to the voluntary savings scheme (KiwiSaver, rates between 10.5% and 39% according to the salary). All new employees are automatically enrolled in the KiwiSaver and employers are required to offer the scheme to all staff. Furthermore, a statutory-based scheme of accident insurance is funded in part by premiums paid by employers and employees at rates that vary according to the industry or risk classification of the employer and the level of earnings of employees.
When making contract payments to non-residents in relation to certain contract activities undertaken in New Zealand, companies should deduct the Non-resident contractor’s tax (NRCT), at a rate of 15% (20% if the relevant paperwork is not provided). Certain transactions are exempted, for example for payments for contract work amounting to less than NZD 15,000 in a 12-month period, when the non-resident has full relief from tax under a DTA or is present in New Zealand for less than 92 days in 12 months.
Other Domestic Resources
New Zealand Inland Revenue
Consult the Doing Business Website, to obtain a summary of the taxes and mandatory contributions.
 

Country Comparison For Corporate Taxation

  New Zealand OECD United States Germany
Number of Payments of Taxes per Year 7.0 10.1 10.6 9.0
Time Taken For Administrative Formalities (Hours) 140.0 163.6 175.0 218.0
Total Share of Taxes (% of Profit) 34.6 41.6 36.6 48.8

Source: Doing Business - Latest available data.

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Individual Taxes

Tax Rate

Individual Income Tax Progressive Rates
Up to NZD 14,000 10.5%
NZD 14,001 to 48,000 17.5%
NZD 48,001 to 70,000 30%
NZD 70,001 to 180,000 33%
NZD 180,000 and above 39%
Allowable Deductions and Tax Credits
Generally, deductions are not allowed against employment income. Taxpayers with low household income may be allowed family support allowances. Tax credits are offered for certain charitable donations and accident insurance premiums. Individuals with annual income between NZD 24,000 and 48,000 and who meet certain requirements are entitled to an "independent earner" tax credit of NZD 520.
Deductions are available for expenditure incurred in deriving gross income or in carrying on a business.
For more details go on the IRD website.
Special Expatriate Tax Regime
A resident of New Zealand is subject to tax on worldwide income, whereas a non-resident is subject to tax only on income from sources in New Zealand.
Residence is determined either by "permanent place of abode" (regardless of how long a person has been outside of New Zealand) or physical presence in the country for 183 days in any 12-month period.

For further details consult the IRD website.

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Double Taxation Treaties

Countries With Whom a Double Taxation Treaty Have Been Signed
See the list of the tax conventions signed by New Zealand.
Withholding Taxes
Dividends: 0/33% (residents) / 0/15/30% (non-residents); Interest: 28/33% (resident companies) / individual income tax rates (resident individuals) / 0/15% (non-residents); Royalties: 0 (residents)/15% (non-residents)

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Intellectual Property

National Organisations
For more information go to the web sites of the two regulation bodies: the Intellectual Property Office of New Zealand and the Copyright Council of New Zealand. You can also consult the Intellectual Property Policy on the Ministry of Economic Development website.
Regional Organisations
New Zealand is a member of the Intellectual Property Rights Experts Group (IPEG) of the APEC community.
International Membership
Member of the WIPO (World Intellectual Property Organization)
Signatory to the Paris Convention For the Protection of Intellectual Property
Membership to the TRIPS agreement - Trade-Related Aspects of Intellectual Property Rights (TRIPS)
 

National Regulation and International Agreements

 
Type of property and law Validity International Agreements Signed
Patent
 
Patents Act 1953 No 64 (as at 01 August 2008) and Patents Regulations 1954 (SR 1954/211) (as at 03 September 2007).

Decisions of the Commissioner since 1953 are published at www.iponz.govt.nz

20 years Patent Cooperation Treaty (PCT)
Trademark
 
Trade Marks Act 2002
10 years renewable for 12 month
Design
 
In New Zealand, the Designs Act 1953 governs the administration of rights to a design. It is accompanied by the  Design Regulations 1954
15 years  
Copyright
 
http://gpacts.knowledge-basket.co.nz/gpacts/reprint/text/2005/an/060.html
10 years. WIPO Copyright Treaty
Industrial Models
 
Copyright Act 1994.

For more information go to this website.

Over 50 Years  

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Legal Framework

Independence of Justice
The judiciary system is independent in New Zealand.
Equal Treatment of Nationals and Foreigners
Foreign nationals can expect an impartial trial from the country’s judicial system.
The Language of Justice
English and Maori are, as the country official languages, the two judicial languages used in New Zealand.
Recourse to an Interpreter
It is possible to have access to an interpreter in New Zealand.
Sources of the Law and Legal Similarities
The New Zealand system is modeled on English Common Law and certain statutes of the United Kingdom Parliament enacted before 1947 (notably the Bill of Rights of 1689). The main source of the law is the Constitution and statutes of the New Zealand Parliament. The Constitution is composed of a series of legal documents, including The Constitution Act of 1986. The legal system is based on English law, but also has special land legislation and courts for the country’s Maori population. New Zealand generally accepts compulsory ICJ jurisdiction. 
Checking National Laws Online
NZ Legislation
Lexadin, the world law guide

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Standards

National Standards Organisations
Standards New Zealand
Integration in the International Standards Network
The standards in New Zealand are copied from those prevailing in Great Britain. The Standard Association of New Zealand, the competent organization in the field of standards is member of the International Organization for Standardization (ISO), the International Electrotechnical Commission (IEC), and is active in the Pacific Area Standards Congress (PASC) and the Asia Pacific Economic Cooperation (APEC).
Classification of Standards
NZS or AU/NZS
Online Consultation of Standards
The publication of standards is entrusted to Standards New Zealand.
Certification Organisations
International Accreditation New Zealand The national authority for the accreditation of testing and calibration laboratories, inspection bodies and radiology services.

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Business Practices

General Information
Kwintessential, New Zealand Business Practices.
Culture Atlas, New Zealand culture
Opening Hours and Days
The normal working week is Monday through Friday. The standard day for commercial establishments, bank and public (civil) service is generally 8:30 a.m. to 5:00 p.m., with a one hour lunch break. In most cities, retail stores are open seven days per week with at least one late night each week, often Thursday or Friday.
 

Public Holidays

New Years Day January 1
Day after New Year’s Day January 2
Waitangi Day (New Zealand National Day) February 6
Good Friday Variable
Easter Monday Variable
Anzac Day April 25
Queen’s Birthday (Observed) First Monday in June
Labor Day Fourth Monday in October
Christmas Day December 25
Boxing Day December 26
Provincial Anniversary Day Dates vary from province to province
 
 

Periods When Companies Usually Close

End of year Usually 1 week around New Year
 

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Latest Update: November 2022