Investment Tax Guide — Tax on Investments, Interest, and Dividends in NZ
the taxation of investments in New Zealand. The guide covers the RWT on interest and dividends, the PIE tax rules, the FIF regime, the crypto-asset taxation, and the tax planning strategies for the investors.
Tax on Investment Income
The investment income in New Zealand is taxed at the investor's marginal tax rate. The main types of the investment income include: (a) the interest from the bank accounts, the term deposits, and the bonds — the RWT is deducted at the source (the rate chosen by the investor), (b) the dividends from the New Zealand companies — the RWT at 33% plus the imputation credits, (c) the PIE income — the income from the Portfolio Investment Entities taxed at the Prescribed Investor Rate (PIR) of 28%, 17.5%, or 10.5%, and (d) the foreign investment income — the income from the foreign equities subject to the FIF rules if the total cost exceeds $50,000.
Tax Planning Strategies
The tax-efficient investment strategies include: (a) choosing the PIE investments for the investors in the 33% and 39% brackets (the PIE income is capped at 28%), (b) electing the correct RWT rate on the interest to match the marginal rate, (c) using the KiwiSaver for the tax-efficient retirement savings (the PIE tax rate applies), (d) holding the investments in the family trust or the company for the income splitting, and (e) using the tax loss selling to realise the capital losses against the capital gains. See our PIE Guide → for the detailed PIE rules.