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Taxation In New Zealand
Home » Tax in Different Regions » Taxation in New Zealand
 

Taxation in New Zealand
Every country of the world has their own system of taxation. New Zealand also has its own system of taxation. Taxation in New Zealand is controlled by the Inland Revenue Department or IRD of new Zealand. Inland Revenue Department or IRD is resposible for the collection of tax in the New Zealand. This collection of taxes is done by Inland Revenue Department or IRD in the national level of New Zealnd. Taxes which are to collected at the national level are levied on various types of income.

National taxes are levied on both the income of the individuals and also on the business incom of any farm. Taxation in New Zealand is also done on the various services provided by the service providers and also on the sale of goods by various sales agencies. One of the most interesting features of taxation in New Zealand is that there is no capital gain tax in New Zealand. Though there are some exceptions in it. Some kinds of capital gains like the gains earned from the profits earned from the sale of patent right are also deemed as profit. There is also provision of local property taxes in the system of taxation in New Zealand. Property tax at the local level is appr opriated by the local councils. These councils also manage the entire taxation of the properties in the local level of the New Zealand.

Taxation in New Zealand went through a complete new phase in the early days of 80. In that time the economy of New Zealand experienced a programme of tax reform. Taxation in New Zealand witnessed the introduction of some new taxes like goods tax and service tax. In the days of 1980 the rate of sale tax was only 10%. According to a report submitted by Organization for Economic Co-operation and development (OECD) in the year 2001 the system of taxation in New Zealand saw a major change. In that year the system of taxation in New Zealand emerged as one of the most neutral and able system of taxation in the world.

Tax reform is an ongoing process in the system of taxation in New Zealand. The main features of tax reform in New Zealand include the following

  • Tax rules in New Zealand are compataible with the international standard of taxation.
  • Various types of investment inomes have been treated in a different angle.
  • Business taxes are levied keeping in view the effect of taxation on the productivity
  • Taxation in New Zealand has been done in such way that it does not hamper the competitiveness of the business firms of the New Zealand.
Business taxes in New Zealand

The various business units of the New Zealand pay the income tax on the net profit earned by the companies. An interesting feature of the taxation in New Zealand is that the payments of income tax in New Zealand can be done in three seperate installments at any tiome of the year. The payment of taxes through installments are called provisional tax payments. At the end of the financila year the business house have to submit a tax return. The tax receiving authority then considers any kind of over payment or under payment made by the business houses.