Fact check: How do New Zealand’s personal tax rates really compare?
Those in favour of hiking personal taxes will typically state that New Zealand’s personal tax rates are relatively low compared with other countries. Don’t fall into the trap of comparing countries’ headline income tax rates. New Zealand is a relatively high taxing country if you compare ‘effective income tax rates’...
Transfer Pricing & Covid-19
Since writing out our last insight (an update on BEPS 2.0) the world finds itself faced with significant change and substantial economic challenges. Whilst businesses are working on Covid-19 economic action plans, it is important to ensure that a review of the group's existing transfer pricing is included. Some...
97% of NZ taxpayers to be taxed higher than in Australia under Labour.
If Labour win the New Zealand election they will impose a top individual tax rate of 39% (income over $180,000). If National win, they will not cut personal tax rates, but will index the tax brackets (an effective tax cut). The Australian Government has legislated tax cuts to be...
Labour’s election 2020 tax policy
Labour have announced their policy to have a new tax band of 39% for individuals earning income over $180,000. There is no planned increase in the trust tax rate and nothing mentioned about the corporate rate. It plans to raise around $550m pa. While it will appeal to those...
Is New Zealand already a high taxing country?
According to recent data released by OECD (includes up to 2018 provisional data), New Zealand: Ranks below the OECD average for total taxes levied as a % of GDP, but is higher than Australia, Japan and USA. But note that New Zealand is: Fourth highest in OECD for personal tax as...
What chance of resurrecting a land tax in New Zealand?
The Green Party policy is to have two new tax brackets at the high-income end, raising about $1.3b revenue pa. But that’s a drop in the ocean if a government is looking to fill a massive budget deficit and fund additional social policies. Hence the Greens propose a comprehensive...
The Canadian Cameco decision – why is it relevant for transfer pricing in New Zealand?
Cameco, the Canadian uranium mining and trading giant, has successfully defended its transfer pricing position involving the establishment of an offshore trading centre in Switzerland and not have its intercompany transactions completely disregarded. The Court disagreed that profits had been wrongly ‘shifted’ from Canada to Switzerland. This decision has relevance...
How realistic is a wealth tax in New Zealand?
The Green Party policy is to impose a new wealth tax as its main plank to fund a proposed revamp of the income support system. It’s an interesting proposal, but unlikely to be widely debated, let alone implemented. While many countries have some form of capital gains tax (CGT)...
Are our personal tax rates high in New Zealand?
On average New Zealand workers earn just below the OECD average income (in USD) and pay a high proportion of average personal income tax. However, they do get to take home a higher percentage of their gross wages compared to workers in many countries where substantive compulsory social security...
OECD digital tax project torpedoed? Where to for New Zealand?
As reported by the NY Times US has suspended talks with OECD to find a consensus reform for the international taxation of the digitised economy via a letter by US Treasury Secretary Steven Mnuchin to European leaders. Our last report highlighted that the US was not comfortable with OECD’s proposed...
Did Google allocate excessive profits to its NZ operations?
Stuff reported that for 2019 Google NZ reported a significant increase in its reported profits and tax payable in New Zealand. Google NZ reported an operating profit of $10.6m, which represents tax payable of around $3m. Considering the overall Google sales in New Zealand captured by Google offshore appear...