Company Tax Guide — Corporate Tax Rate, Imputation, and Compliance in NZ
the company taxation in New Zealand. The guide covers the corporate tax rate of 28%, the dividend imputation system, the company tax return (the IR4), the provisional tax for the companies, the loss offset rules, and the company compliance obligations.
Corporate Tax Rate and Imputation
The New Zealand corporate tax rate is 28% for all the companies (the "flat rate"). The company pays the tax on the net taxable income (the "assessable income" minus the "allowable deductions"). The imputation system ensures that the company's after-tax profits can be distributed to the shareholders as the "imputed dividends" (the dividends with the attached imputation credits). The imputation credit account (the "ICA") records the tax paid by the company that can be allocated to the shareholders. The ICA must be maintained by all the NZ-resident companies paying the dividends.
Company Tax Returns
The company must file the annual tax return (the IR4) by the 7th of the following month after the balance date (the "filing date" — the 7th of the month after the balance date, or the 7th of the 4th month after the balance date for the non-standard balance dates). The company must also pay the provisional tax in the instalments (the "ratio option", the "estimation option", or the "standard option" at 5% above the previous year's tax). The company losses can be carried forward and offset against the future income (the "shareholder continuity" requirement — 49% continuity for the loss carry-forward for the companies with the more than 10 shareholders).