Taxes in New Zealand

New Zealand depends on Tax to assist fund services that benefit all New Zealanders. All tax paid to New Zealand – Government is known as Inland Revenue Department (IRD). This article will assist you to know about taxes in New Zealand. It is just information about taxes — we suggest you seek professional advice for taxes.

Types of taxes in New Zealand

Business and Individuals must pay tax to the Inland Revenue Department. IRD also collects tax on Goods and Services in New Zealand (GST).

• Income Tax.
• Good and Services Tax.

How to pay income tax

If you are an employee in a company, the company will take PAKE tax from your salary before paying to you and pay it to IRD (Inland Revenue Department). But some people need to file an income tax return file (IR3) to declare their income.

An IR3 is the statement on how much you earned over the tax (1 Apr to 31 Mar). It includes money earned from a range of sources, like salary, overseas income, rental income, and investments.

Filing a tax return

Most new arrivals need to return a file in their first year. Non-residents like work on a visa need to return a file before leaving New Zealand.

Get an IRD number

If you’re earning in New Zealand, you will need an IRD number. If you do not have an IRD, you’ll be taxed at the highest possible rate.

Business tax

If you are starting a new business in New Zealand you must have information about tax obligations. The IRD portal has tax information and videos for business. They also run proper workshops for business owners.

Tax rates

Income tax

Personal’s tax depends on your income increases.

• The top personal tax rate is 39%.
• The lowest personal tax rate is 10.5%.

Companies are taxed at a flat rate of 28%.

GST (Goods and Service) tax

IRD has a simpler tax system as compared with other countries’ systems. A 15% tax is applied on Goods and Services buying in New Zealand. There are also some services that are exempt from GST include residential rents, financial services and mortgage payments. Visit New Zealand GST Calculator to calculate your GST.

Features of New Zealand tax system

New Zealand’s is fair and has low loopholes. In 2019, US Based tax foundation ranked New Zealand at second position in the developed world.

Key attractions

Key Attractions include:

• No payroll tax.
• No inheritance tax.
• No general capital gains tax.

Tax exemption for new migrants

If you’re a migrant you don’t need to pay GST on your first 4 years overseas income. This means you need to pay GST only on what you earn from New Zealand.

FAQs

Are taxes high in New Zealand?

Yes, taxes in New Zealand are generally considered to be relatively high compared to some other countries.

What is not taxed in NZ?

Basic groceries, health services, and financial services are not subject to the Goods and Services Tax (GST) in New Zealand.

What is the NZ income tax rate?

New Zealand’s income tax rates range from 10.5% to 39%, depending on the individual’s income level.

Is Healthcare Free in New Zealand?

Yes, public healthcare services are largely funded through taxation and provided for free or at a heavily subsidised cost to residents and citizens of New Zealand.