New Zealand

Details

  • Service: Tax
  • Type: Business and industry issue
  • Date: 6/04/2011

Tax

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Taxmail - Draft legislation on Foreign Investment PIEs released 

Issue 2, 6 April 2011

 

The Government has introduced a Supplementary Order Paper ("SOP") to the Taxation (Tax Administration and Remedial Matters) Bill to remove tax disadvantages to non-resident investment in PIEs. The SOP is available at www.taxpolicy.ird.govt.nz.

 

Currently, non-resident investors in PIEs are taxed at 28% on their PIE income.

 

This results in over-taxation for such investors on the PIE’s foreign assets (a 0% New Zealand tax rate should apply) as well as NZ investments (New Zealand dividends and New Zealand sourced interest are generally taxed at 15% and 10%, respectively, with the latter reduced to 2% under the Approved Issuer Levy, for direct investment).

 

The Foreign Investment PIE proposal, which is optional, aims to replicate this treatment for non-residents.

 

Please refer to the article for the key features.

 

If you have any questions on the above, please speak to your usual KPMG advisor or contact:

 

Paul Dunne

Partner - Tax
Auckland
Phone: +64 9 367 5991

pfdunne@kpmg.co.nz

John Cantin

Partner - Tax

Wellington
Phone: +64 4 816 4518

jfcantin@kpmg.co.nz

Taxmail - Comment on topical tax issues from KPMG NZ Tax. 

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