Taxation in New Zealand

Taxes in New Zealand are collected at a national level by the Inland Revenue Department (IRD) on behalf of the Government of New Zealand. National taxes are levied on personal and business income, and on the supply of goods and services. There is no capital gains tax, although certain "gains" such as profits on the sale of patent rights are deemed to be income – income tax does apply to property transactions in certain circumstances, particularly speculation. There are currently no land taxes, but local property taxes (rates) are managed and collected by local authorities. Some goods and services carry a specific tax, referred to as an excise or a duty, such as alcohol excise or gaming duty. These are collected by a range of government agencies such as the New Zealand Customs Service. There is no social security (payroll) tax.

New Zealand went through a major program of tax reform in the 1980s. The top marginal rate of income tax was reduced from 66% to 33% (changed to 39% in April 2000, 38% in April 2009 and 33% on 1 October 2010) and corporate income tax rate from 48% to 33% (changed to 30% in 2008 and to 28% on 1 October 2010). Goods and services tax was introduced, initially at a rate of 10% (then 12.5% and now 15%, as of 1 October 2010). Land taxes were abolished in 1992.

Tax reform continues in New Zealand. Issues include:

New Zealand residents are liable for tax on their worldwide taxable income. In 2005–06, 43% of the New Zealand Government's core revenue ($22.9bn) came from individuals' income taxes.

Income tax varies dependent on income levels in any specific tax year (personal tax years run from 1 April to 31 March).

Rates are for the tax year 1 April 2015 to 31 March 2016, and are based on tax code M (primary income without student loan) and excludes the ACC earners' levy. The earners' levy rate (including GST) for the period 1 April 2015 to 31 March 2016 is 1.45% ($1.45 per $100).

In New Zealand, the income is taxed by the amount that falls within each tax bracket. For example, persons who earn $70,000 will pay only 30% on the amount that falls between $48,001 and $70,000 rather than paying on the full $70,000. Consequently, the corresponding income tax for that specific income will accumulate to $14,020— which comes to an overall effective tax rate of 20.02% of the entire amount.

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