NEW ZEALAND Law and Practice Contributed by: Ashton Goatley, Henry Willis, Sarah Keene and Erin Hickey, Webb Henderson
The OIO also has wide discretion to impose further special conditions on the consent. 7.4 National Security Review Enforcement The OIO can block overseas investments where an application for consent has been made. In this situ - ation, the OIO will notify the applicant of its inten - tion to decline the application. The applicant will then have 15 working days to provide further information before a final assessment is made. If OIO consent is required for a transaction, proceeding without consent is a criminal offence. If an investor breaches the OI Act (eg, by proceeding without consent where it is required), the OIO has a range of enforcement tools available, including issuing disposal notices. Enforceable undertakings may also be voluntarily given to address breaches, in lieu of more serious enforcement action by the OIO. For more serious breaches, the OIO may (through court action) also seek injunctions, orders requiring compliance with the OI Act, criminal penalties or civil pecuniary penalties. Civil proceedings may result in orders for the disposal of property, and penalties of up to NZD500,000 for individuals, or NZD10 million or three times the quantifiable gain in any other case. Criminal proceedings may result in up to 12 months’ imprisonment or a fine of up to NZD300,000. A summary of any warnings issued or enforcement action taken by the OIO is made available to the public on the OIO’s website. As a United Nations member state, New Zealand is bound by the decisions of the United Nations Secu - rity Council (UNSC). New Zealand has implemented UNSC sanctions through regulations made under the (domestic) United Nations Act 1946. New Zealand persons are required to comply with such domestic regulations. In addition to UNSC sanctions, New Zealand also has standalone legislation that imposes sanctions inde - 8. Other Review/Approvals 8.1 Other Regimes
pendently of the UNSC, to deal with circumstances where the UNSC is unlikely or unable to act. An exam - ple is the Russia Sanctions Act 2022, which imposed sanctions in response to the military actions by Russia in Ukraine. New Zealand legislation also provides for further measures such as travel bans on certain indi - viduals entering the country. New Zealand does not restrict foreign exchange trans - actions (other than the usual anti-money laundering procedures in line with international treaties).
9. Tax 9.1 Taxation of Business Activities Overview
New Zealand-resident companies are taxed on their worldwide income, while non-resident companies and their New Zealand branches are generally taxed only on their New Zealand-sourced income. The current corporate income tax rate is 28%. New Zealand is a party to a number of tax treaties (with 41 currently in force), under which taxing rights are most commonly allocated to the taxpayer’s country of residence (with limited taxing rights generally retained by the coun - try in which the income is sourced, particularly with respect to passive income such as dividends, interest and royalties). Income Tax Companies pay income tax in their own right. Income tax paid by companies generally gives rise to non- refundable tax credits for their domestic sharehold - ers, which can be used to reduce (or, in certain cir - cumstances, eliminate) withholding tax on dividends. These are known as “imputation credits” (see 9.2 Withholding Taxes on Dividends, Interest, Etc ). By contrast, for income tax purposes, a partner in a partnership (including a limited partnership) is treated as carrying on the partnership’s activities, having its intentions and purposes, holding its property and being a party to its agreements/arrangements. The partnership itself is generally disregarded. Thus, if a partner disposes of some or all of its interest in the partnership, it is generally treated as directly disposing of a proportionate share of the partnership’s assets
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