Welcome to New Zealand

 

 

 

 

 

New Zealand Taxes

 

New Zealand Taxes

New Zealand Taxes

New Zealand taxation is collected at a countrywide level by the IRD or Inland Revenue Department on behalf of the State of New Zealand. Taxes for the nation are levied on business and personal income, and on the supply of services and goods.

There is no tax on capital gains, even though certain earnings such as those that come from patent rights are considered to be income.

 

Property taxes on a local level are handled and gathered by councils. Some services and goods bear a particular tax, known as a duty or an excise tax. These include gaming duty and alcohol excise. The NZ Customs Service and several other state agencies collect these specific taxes.During the 1980s, New Zealand had undergone an extreme tax reformation program. The topmost borderline rate of income tax was cut down from 66 percent to 33 percent and has since gone up to 39 percent in 2000 of April 2000. Corporate income tax rate went down from 48 percent to 33 percent and was further reduced to 30 percent in 2008.

Services and goods tax was brought in, beginning at a rate of 10 percent and is currently at 12.5 percent. A report of OECD in 2001 reported the tax system of New Zealand as one of the most efficient and neutral among its members.

The residents of New Zealand are legally responsible for tariff on their global taxable income. In 2005 to 2006, 43 percent of the core revenue of the government of New Zealand which translates to 22.9 billion New Zealand dollars came from the income taxes of individuals. There are 5 kinds of taxable income.

 

These are wages and salary, self-employed and business income, investment income such as dividends and interest, income from rental, and income from overseas such as overseas pension income. The income tax in New Zealand is charged by the sum that falls under a specific tax bracket. For instance, if an individual earns NZ$70,000, they are required to pay only 33 percent on the sum that falls between NZ$48,001 and NZ$70,000 instead of paying this on the entire NZ$70,000.Accordingly, the equivalent income tax for that particular income will build up to NZ$16,150 or approximately 23 percent of the whole amount. More often than not employers subtract the pertinent sum of income tax from wages and salary before it is given to the employee. PAYE or Pay-as-you-earn is a system, which was started in 1958, before which employees were required to pay their taxes yearly.

 

Additionally, financial institutions such as banks subtract the applicable rate of income tax on dividends and interest as they are garnered. This is called the Residents Withholding Tax.

At the closing of every tax year those who haven’t yet paid the correct sum of income tax are obligated to present a personal summary of tax, to let the IRD to determine any overpayment or underpayment of tax completed for that year.

In cases wherein a person is a tax resident in two or more countries, he may be required to give tax more than one time on one income. There are double taxation agreements between New Zealand and several other countries that make it its job to find out which nation will charge taxes on particular kinds of income.
 

 

  

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