New Zealand is more than just the land of hobbits, kiwis, and the All-Blacks rugby team.
It’s also a business-friendly environment with a range of tax incentives designed to encourage growth and investment.
Whether you’re an employer or an individual taxpayer, the New Zealand tax system offers various credits and benefits that can significantly reduce your tax liability.
Here’s a comprehensive look at some of the reasons to move your business to New Zealand.
Tax credits and benefits for businesses and individuals
Employers can claim credits for Pay as You Earn (PAYE) tax deducted from employee wages, which helps to offset the business’s tax liability.
Business taxpayers can also claim credits for instalments of provisional tax paid, aiding in cash flow management.
Additionally, credits can be claimed for Resident Withholding Tax (RWT) deductions on interest and dividends paid to residents.
The RWT rates vary, and it’s essential to notify your bank of the correct rate to avoid higher default rates – an experienced tax adviser could help with this.
Credits can also be claimed for Withholding Tax deducted from payments made to contractors.
Imputation and personal tax credits
The imputation system eliminates double taxation on company profits by allowing companies to attach imputation credits to dividends and taxable bonus issues distributed to shareholders.
Shareholders can then use these credits to reduce their tax liability unless they are non-residents.
For individuals, those earning between £11,500 and £23,000 annually may be entitled to an ‘independent earner’ tax credit, which decreases for incomes over £21,150. *
*These figures are adjusted from NZD so may change depending on conversion rates.
Additional credits
An individual can claim a 33.3 per cent tax credit for eligible charitable donations, up to their taxable income.
There’s also the ‘Working for Families’ tax credit aimed at low and middle-income families, providing an in-work payment for families with dependent children.
While this may not directly benefit your business, it can make your company more attractive to potential employees.
Conclusion
New Zealand offers a robust range of tax incentives that can be highly beneficial for international entrepreneurs looking to expand their business.
Coupled with the country’s stable Government, strong governance, and high quality of life, New Zealand is becoming an increasingly attractive destination for international business expansion.
To start your very own Middle Earth adventure in New Zealand, please contact one of our international tax experts.
Reanda UK is a subsidiary of leading independent accountancy firm Grunberg & Co Limited. Our aim is to help businesses and individuals to navigate the UK’s world-renowned business and tax infrastructure, and to support them with their international ambitions. To find out how we can help you, please contact us.