Taxation in New Zealand

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Taxation in New Zealand falls into several categories.

Contents

1 Income Tax

1.1 Types of taxable income

2 Goods and Services Tax (GST)
3
4 See also

Income Tax

Income tax on earnings is required to be paid to the Inland Revenue Department [link] of the Government of New Zealand. No local or regional income or sales taxes exist in New Zealand.

Most of the New Zealand populace pay their income tax as they earn their income. Employers deduct tax based on salary and wages. This is commonly known as Pay As You Earn, or PAYE, tax. Banks and other financial institutions deduct Resident Withholding tax on interest as it is earned.

People who do not pay tax on all of their income as it is earned are required to settle their taxes with Inland Revenue at the end of the tax year (31 March). In most cases Inland Revenue will send you all the material you need to do this. If you are in this category may be required to pay 'provisional tax' in which case you must pay your tax in three instalments through the year.

Types of taxable income

salary and wages
business and self-employed income
most social security benefits
income from investments (stocks, bonds, etc...)
rental income
profit from selling capital assets (this does not typically apply to personal assets)
income you earn from overseas

All New Zealand tax residents are liable for income tax on their world-wide income.

You may be a tax resident in New Zealand and another country.

If both countries tax their residents on world-wide income, you could be taxed twice.
New Zealand has negotiated double taxation agreements with many other countries so that this does not happen.

Goods and Services Tax (GST)

Goods and Services Tax (GST) is charged at the rate of 12.5% for virtually all goods and services, excluding exports, financial services, and some other items.

If you are self employed (or a business) and your annual turnover is above a certain amount you must 'register' for GST purposes and charge GST on all your services. You can then claim back the GST paid on any business-related purchases and expenses.

Taxation in New Zealand

Income Tax

Types of taxable income

Goods and Services Tax (GST)

See also