Under the proposals, which were published by the NZ Inland Revenue in July, the country would scrap existing rules on the taxation of foreign superannuation schemes under which tax can currently be imposed via a number of different routes. Instead, a scheme member would only need to decide whether they should pay tax to New Zealand on receipt of a pension payment or lump sum or when it is transferred to another scheme.
The tax rate applied would be between 10.5% and 33% – the person’s “marginal tax rate” – and this will be applied to between 0% and 100% of the transfer or withdrawal value, depending on how long a person has resided in the country – an “inclusion rate” (see below for full inclusion rate breakdown).
The Inland Revenue said the new system is intended to simplify the taxation of foreign superannuation schemes and to make it easy for people to comply.
A spokesperson informed International Adviser that it is “important to note at this early stage, they are just proposals and that what was stated in the issues paper may change”.
She also said that the proposals are subject to a public consultation and, as with the UK, feedback on tax policy proposals can shape final draft legislation.
The Inland Revenue said it anticipates legislation implementing any changes will be introduced early next year.
Click here for a factsheet explaining the proposals from the NZ Inland Revenue
Inclusion rates
|
Years since migration |
Inclusion rate |
|
0-2 |
0% |
|
3-4 |
15% |
|
5-8 |
30% |
|
9-12 |
45% |
|
13-16 |
60% |
|
17-20 |
75% |
|
21-24 |
90% |
|
25+ |
100% |
