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
Trade Remedies Anti-dumping and countervailing duties may be imposed under the Trade (Anti-dumping and Counter - vailing Duties) Act 1988 where dumped or subsidised imports cause material injury to a domestic industry. Safeguard measures are available under the Trade (Safeguard Measures) Act 2014 where increased imports cause serious injury. The current global envi - ronment of escalating trade tensions, including retali - atory tariff measures between major trading blocs, has heightened awareness of these tools, though New Zealand has historically used trade remedies spar - ingly. The Commerce Commission has regulatory oversight of mergers and acquisitions in New Zealand, and has the ability to issue clearances for proposed mergers and take regulatory enforcement action in respect of proposed or concluded mergers. New Zealand does not have a mandatory notification regime, neither in respect of all transactions nor for transactions meeting specific criteria; rather, parties may voluntarily choose to seek clearance from the Commerce Commission. Clearance will be granted if the Commerce Commission is satisfied that the merger or acquisition is unlikely to have the effect of substantially lessening competition in the market. The Commission may also grant an authorisation in respect of a merger if it will be likely to substantially lessen competition but the public benefit is such that the Commission considers it should be permitted. Clearance and authorisations remain effective for 12 months from the date issued. 6. Competition Law 6.1 Merger Control Notification If the parties to a transaction choose not to seek vol - untary clearance or authorisation, they may be subject to court proceedings by the Commerce Commission or a third party. The court has the power to grant pro - hibitory injunctions or order damages, divestiture or pecuniary penalties where an acquisition would have the effect or likely effect of substantially lessening competition. Businesses should be aware that sig -
wide discretion to reconstruct the taxpayer’s income to counteract the tax advantage obtained. This is one of the most frequently litigated areas of New Zealand tax law. Controlled Foreign Company Rules The CFC rules in subpart EX of the Income Tax Act 2007 attribute certain types of income earned by for - eign subsidiaries to their New Zealand-resident con - trollers. These rules prevent New Zealand residents from sheltering passive or highly mobile income in overseas entities located in low-tax jurisdictions. Where a New Zealand resident holds an income inter - est of 10% or more in a CFC, attributable income is taxed in New Zealand in the year it is earned, regard - less of whether it has been distributed. Together with the thin capitalisation and transfer pric - ing rules, the general anti-avoidance rule and the CFC regime form New Zealand’s broader framework for ensuring that international tax obligations are met and profits are not diverted from the New Zealand tax base. 5.8 Tariffs Tariff Regime New Zealand maintains a comparatively liberal tar - iff regime. Tariff duties are imposed under the Tariff Act 1988 and collected by the New Zealand Customs Service under the Customs and Excise Act 2018. The majority of goods enter New Zealand at a zero or very low rate of duty. Residual tariffs of up to 10% apply to a limited range of goods, primarily in the textiles, clothing, footwear and carpet sectors. These are the only sectors where tariffs are specifically designed to provide ongoing protection to domestic manufacturers. Preferential Trade Agreements New Zealand has an extensive network of free trade agreements, including the CPTPP, RCEP, AANZFTA, PACER Plus, and bilateral agreements with countries including China, Australia, the Republic of Korea and the United Kingdom. Goods originating in preferential countries attract reduced or zero rates under the Pref - erential Tariff. An agreement with the European Union entered into force in May 2024.
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