NEW ZEALAND Law and Practice Contributed by: Fiona Ashby, Luke Bowers, Daniel Erickson, Jessica Phillips, Natalie Foster, Shelley Slade-Gully, Tina Liu and Theresa Le Bas, Tompkins Wake
Non-Resident Withholding Tax Non-residents receiving passive income from New Zealand are subject to Non-Resident Withholding Tax (NRWT). The domestic rates are as follows: • dividends: 30% (unfranked) or in many cases 0% (fully imputed with tax credits attached); • interest: 15%; and • royalties: 15%. These rates are frequently reduced by New Zealand’s extensive network of double tax agreements. As an alternative to NRWT on interest, an approved issuer may pay a reduced 2% Approved Issuer Levy on inter - est paid on registered securities. Transfer Taxes New Zealand does not impose stamp duty or transfer taxes on the transfer of real property, shares or other assets. Other Taxes Employers are liable for Fringe Benefit Tax (FBT) on non-cash benefits provided to employees, with rates of up to 63.93% depending on the calculation method chosen. Customs and excise duties apply to the importation of certain goods, including alcohol, New Zealand has enacted comprehensive Pillar Two legislation through the Taxation (Annual Rates for 2023–24, Multinational Tax, and Remedial Matters) Act 2024. The Income Inclusion Rule applies for fis - cal years beginning on or after 1 January 2025, while the Undertaxed Profits Rule and a Qualified Domestic Minimum Top-up Tax (QDMTT) apply from 1 Janu - ary 2026. These rules ensure that large Multinational Enterprises (MNEs) with consolidated revenue of at least EUR750 million pay an effective tax rate of at least 15% in each jurisdiction where they operate. As at the date of writing, New Zealand’s QDMTT has not yet been confirmed as having been granted safe harbour status on the OECD Inclusive Frame - work’s central record, though the assessment process remains ongoing. tobacco and fuel. OECD Pillar Two
Local taxpayers are responsible for registering MNEs subject to the Pillar Two rules, with registration required within six months of the first financial year in scope. For the initial cohort, this means registration should be completed by 30 June 2026 for MNEs with a 31 December 2025 year-end. The principal tax incentive is the Research and Devel - opment Tax Incentive (RDTI), which provides a 15% tax credit on eligible R&D expenditure up to NZD120 million per annum. To qualify, a business must spend at least NZD50,000 on core R&D activities conducted using a systematic approach with a material purpose of resolving scientific or technological uncertainty, and with the intention of creating new knowledge or new or improved processes, services or goods. The claim - ant must carry on business through a fixed establish - ment in New Zealand. Unused credits may be carried forward, and refundability may be available for eligi - ble companies meeting wage intensity criteria to the extent that the current year credit exceeds the current year tax liability. Research and Development Loss Tax Credit 5.3 Available Tax Credits/Incentives Research and Development Tax Credit A separate Research and Development Loss Tax Credit (RDLTC) is available to non-listed entities in a tax loss position, whereby the loss can be “cashed- out” instead of being carried forward. There are vari - ous requirements for this, including the need to spend at least 20% of salaries on R&D, a cap of NZD560,000 and the intellectual property (IP) needing to be owned by the claimant. There are also various clawback events available, such as sale of the IP. Investment Boost Introduced in 2025, this incentive allows business - es an additional 20% deduction on the cost of new depreciable assets in the year the asset first becomes available for use. The asset must never previously have been used in New Zealand. Excluded assets include dwellings and fixed-life intangible property. Loss Grouping Companies within a group of companies with at least 66% common ownership may transfer tax losses
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