New Zealand: corporate tax guide

What the tax system covers

Resident companies generally enter tax on worldwide income. Incorporation, head office, centre of management and control by directors are alternative residence connections. Active CFC exemptions and foreign-tax relief do not erase the need to identify the relevant income first.

When a company becomes tax resident

IRD lists incorporation, head office, centre of management and controlling directors as alternative company-residence tests. Foreign incorporation therefore does not end the analysis. Where more than one country treats a company as resident, treaty relief may require competent-authority determination rather than an automatic tie-breaker. Document actual governance and review proposed moves before they occur.

Rates and the tax base

28% for most companies. Ordinary company income tax applies to taxable profit. Look-through companies, Māori authorities, trusts and individual sole traders have different treatments.

Outbound dividends, interest and royalties

Dividends: 30% before imputation exceptions. The published non-treaty default is 30%. Fully imputed distributions can receive different treatment, including zero NRWT for qualifying non-portfolio holdings; do not apply 30% mechanically to every company distribution.

Interest: 15%. Published domestic non-treaty NRWT rate. Interest may qualify for a separate approved-issuer-levy route; exemptions and treaty eligibility must be assessed before payment.

Royalties: 15%. Domestic NRWT on royalties is 15% before treaty relief. Classify the actual intellectual-property payment and recipient entitlement; the approved-issuer levy for interest is not royalty relief.

CFC control, attribution and company residence are different tests

A foreign company can be a CFC where five or fewer New Zealand residents hold more than 50% control, control shareholder decision rights, or a qualifying single resident has at least 40% with no larger non-associated foreign controller. The income-attribution threshold generally concerns an income interest of at least 10%. Active and non-active businesses are treated differently, with special issues for personal services.

Before those shareholder rules, check whether the company is itself New Zealand resident through incorporation, head office, centre of management or director control. A foreign registered office is not conclusive. Dual residence may require treaty competent-authority treatment; do not assume every treaty supplies an automatic management tie-breaker. Transitional relief for an individual cannot simply be applied to a company’s profits.

Investment and currency rules can tax amounts without a dividend

Foreign investment funds and financial arrangements are separate regimes. A portfolio investment does not necessarily follow the CFC active-business treatment. IRD’s financial-arrangements guidance explains that the rules can spread income and expenses over time and require a final base-price calculation, with specific exclusions and transitional-resident treatment.

Keep original-currency and New Zealand-dollar records of loans, deposits, bonds and relevant transactions. Currency movements can produce an unexpected New Zealand-dollar result. Before the transitional exemption ends or residence ceases, review each arrangement and any required adjustment. This is why the absence of a general capital-gains tax is not a reliable summary of the tax treatment of a founder’s worldwide assets.

Personal departure does not migrate the company or end visa conditions

A New Zealand-incorporated company does not cease residence merely because its owner moves. A foreign-incorporated company may remain resident through local management or director control. Decide which operations continue and document any genuine transfer of functions and authority. Corporate migration, distributions and retained assets need their own analysis.

If you hold Active Investor Plus residence, continue meeting investment and evidence commitments unless the authority has confirmed a change or release. Tax nonresidence and immigration compliance are different questions. Arrange a local contact for tax notices, keep records and review any effect on Working for Families, student loans or other programmes. Before arriving in the next country, establish how it will treat retained companies, investments and any future distributions.

Company control and foreign investments need their own workstream

A foreign-incorporated company may become New Zealand resident through its head office, centre of management or control by directors. Personal transitional relief does not exempt the company itself. If it remains foreign, CFC or foreign-investment-fund rules may be relevant to the owner, subject to the applicable exemptions and thresholds. Record who exercises authority after the move.

Financial arrangements can also produce taxable amounts linked to currency movements, even without an economic profit measured in the original currency. IRD’s current guidance identifies foreign-currency bank accounts, loans and bonds as examples requiring analysis, and departure can create a base-price adjustment. Offshore Capitalist can coordinate the migration, investment and cross-border tax work so the family understands both the opportunity and the obligations that remain after arrival.

Foreign companies and income attribution

CFC income attribution and separate FIF rules can apply; active-business and transitional-resident exceptions matter.

Departure, migration and continuing obligations

Financial-arrangement base-price adjustments can arise for departing individuals, with specific transitional/cash-basis exceptions. FIF category and corporate migration need separate review.