New Zealand

Goods and services tax (GST)

GST is a form of value-added tax (VAT) that applies to most supplies of goods and services, including low-value imported goods, services, and intangibles supplied remotely by an offshore supplier to New Zealand resident consumers. The narrow category of exempt supplies includes financial services. The rate applied to taxable supplies is currently 15% or 0%.

The 0% rate applies to a few supplies only, including exports and financial services supplied to other registered businesses. The 0% rate also applies to a supply that includes an interest in land between two GST-registered parties if the purchaser acquires the land with the intention of using it to make taxable supplies and the land is not intended to be used as a principal place of residence for the purchaser or an associate, or in relation to the sale of a business as a going concern.

There is also a ‘reverse charge’ mechanism that requires the self-assessment of GST on the value of certain imported services that are intended to be used to make exempt or non-taxable supplies.

GST is also imposed on remote services provided by non-residents to New Zealand private consumers. The concept of 'remote services' is wide and includes streamed and downloaded digital products (e.g. music, movie, and game downloads, e-books, e-magazines) as well as remotely provided webinars, software, web design and publishing, insurance, gambling, consulting, IT, and professional services. Offshore sellers are also required to register and account for GST at 15% on supplies of low-value imported goods (LVIGs) if sales to New Zealand private consumers in a 12-month period exceed NZD 60,000. The NZD 60,000 threshold is the same GST registration threshold that applies to domestic businesses and offshore suppliers of cross-border remote services.

Supplies of remote services, LVIGs, and certain other kinds of 'listed services' supplied through an electronic marketplace platform are subject to special rules. Under these rules, the electronic marketplace platform (and not the underlying supplier) is required to collect and return GST at 15%. Listed services for the purposes of these rules include taxable accommodation, ride-sharing, and food and beverage delivery services.

Since 1 April 2024, these rules also apply to taxable accommodation, ride-sharing, and food and beverage delivery services that are provided through electronic marketplaces. This means that electronic marketplace operators facilitating these services via their platform are required to collect and return GST at the standard rate of 15% when they are performed, provided, or received in New Zealand

Non-residents who do not make taxable supplies in New Zealand can register for GST, provided they meet certain criteria, allowing them to claim a refund for their input GST costs.

Customs duties

Customs duty is levied on some imported goods at rates generally ranging from 5% to 10%.

Excise duty

Excise duty is levied, in addition to GST, on alcoholic beverages (e.g. wines, beers, spirits), tobacco products, and certain fuels (e.g. compressed natural gas, gasoline). The excise duties are levied item-by-item at rates that vary considerably.

Property taxes

Local authorities levy tax known as 'rates' on land within their territorial boundaries. Rates are levied on properties based on the properties’ rateable value.

Residential land withholding tax (RLWT)

RLWT applies to the sale of residential land in New Zealand by an 'RLWT offshore person'. RLWT applies in relation to land that was:

• sold within five years for property acquired on or after 29 March 2018 and sold before 1 July 2024, or
• sold within two years of acquisition for property sold on or after 1 July 2024.

An 'RLWT offshore person' includes all non-New Zealand citizens and non-permanent residents. It also includes a New Zealand citizen who is living overseas if they have been overseas for the last three years. A holder of a New Zealand residence class visa may be an offshore person if they are outside New Zealand and have not been in New Zealand within the last 12 months. New Zealand trusts and companies may also be 'offshore persons' if there are significant offshore interests in them.

The amount of RLWT to be deducted is the lesser of:

• 10% of the current purchase price
• the gain on sale x the RLWT rate (28% for companies, incorporated clubs, and societies), or
• the current purchase price less outstanding local authority rates and security discharged amounts, depending on which party is withholding the tax.

Transfer taxes

There are no taxes on the transfer of property in New Zealand.

Stamp duty

Stamp duty has been abolished in respect of instruments executed after 20 May 1999.

Accident compensation levy

A statutory-based scheme of accident insurance is funded in part by premiums payable by employers and employees.

Premiums paid by employers (including the self-employed) fund insurance for work-related accidents. Employers are liable to pay a residual claims levy and an employer levy. The employer levy payable is determined according to the industry or risk classification of the employer and the level of earnings of employees.

Fringe benefit tax (FBT)

Employers are subject to a tax-deductible FBT on the value of non-cash fringe benefits provided to their employees. Employers can elect to pay FBT at a flat rate (from 1 April 2021, 63.93%) or under an alternate rate method. Under the alternate rate methods, benefits are split into attributed and non-attributed benefits (i.e. those benefits that cannot be attributed to a particular employee), and a ’wash-up‘ calculation is performed in the final quarter. There are three different alternate rate methods available, being the full alternate rate, short form alternate rate, and pooled alternate rate). FBT is applied with reference to whether the benefit is attributed and the individual employees’ remuneration.

Under the full alternate rate option, the applicable FBT rate depends on the net remuneration (including fringe benefits) paid to the employee. The attribution calculation treats the fringe benefit as if it was paid in cash and calculates FBT as the notional increase in income that otherwise would have arisen.

The fringe benefit-inclusive cash remuneration thresholds and FBT rates are as follows:

FBT rates

Changes to income tax rate brackets, which apply from 30 July 2024, will have consequential impacts on the FBT thresholds set out above. However, these changes are proposed to take effect from 1 April 2025. 

Fringe benefits include motor vehicles available for private use, loans at below prescribed interest rates, contributions to medical insurance schemes, and non-monetary employer contributions to superannuation schemes.

In relation to motor vehicles, employers can value a vehicle on an annual basis either using 20% of the cost price or market value (GST inclusive) of the vehicle (depending on whether the vehicle is owned or leased by the employer) or 36% of the vehicle’s tax written down value (GST inclusive). In each case, the FBT value must be reduced proportionately for whole days when the vehicle is not available for private use at any time.

FBT is also applicable to benefits received by an employee from a third party where there is an arrangement between the employer and the third party and where the benefit would be subject to FBT if it had been provided by the employer.

Employer superannuation contribution tax (ESCT)

Employers’ contributions to an approved superannuation fund (excluding foreign schemes) are subject to ESCT. This includes employer contributions to KiwiSaver (or other qualifying registered superannuation schemes).

ESCT is generally deducted at the employee’s relevant progressive rate based on the total salary or wages and employer superannuation cash contributions paid to the employee in the previous year.

Changes to income tax rate brackets, which apply from 30 July 2024, will have consequential impacts on the ESCT thresholds set out below. However, these changes are proposed to apply from 1 April 2025.

Non-resident contractor’s tax (NRCT)

New Zealand imposes an obligation on payers to withhold tax (NRCT) on payments to non-resident contractors in relation to certain contract activities undertaken in New Zealand. Contract activities generally relate to services but also include the granting of a right to use property in New Zealand. 

The rate of NRCT depends on the type of work performed and whether the contractor has provided a completed notification form (IR330C). The default NRCT rate is currently 15% (or 45% for individuals and 20% for companies if the relevant paperwork is not provided). Some contractors are eligible to apply for an exemption or a reduced rate.

NRCT is not required to be withheld if the non-resident contractor:

• has a certificate of exemption
• meets the 92-day rule and has full relief under an applicable double tax agreement, or
• receives payments below the NZD 15,000 threshold. In such cases, contractors themselves are responsible for paying any New Zealand tax owed at the end of the year (provided there is no relief from tax under a DTA).

Offshore gambling duty

Offshore gambling operators are subject to a specific offshore gambling duty of 12% of gambling profits. Profits for the purposes of these rules exclude amounts that are already subject to a similar tax on sports betting.