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New Zealand tax (nearly) on top

Joanne Dale-Fuller - Friday, November 21, 2014


A non-partisan research think tank based in Washington DC, the Tax Foundation, recently conducted a survey to measure the degree to which the 34 OECD countries promoted competitiveness through their tax systems.  In so doing, more than 40 variables across 5 categories were considered.  The 5 categories are:

  • corporate taxes;
  • consumption taxes;
  • property taxes;
  • individual taxes; and
  • international tax rules.

In studying these 5 variables the Tax Foundation attempted to demonstrate which country fosters the best tax environment for both investment and for developing a business.  The importance of these findings is significant as companies or businesses can and do move from less competitive jurisdictions to more competitive jurisdictions as and when deemed necessary.

Whilst Estonia was ranked as having the most competitive tax system of the countries surveyed, English speaking New Zealand was second ranked.  It was noted that in New Zealand, the top marginal tax rate for individuals is 33%, the corporate tax rate is now 28% and there is a notable absence of inheritance taxes, payroll taxes and the application of a general capital gains tax.

New Zealand continues to work hard to improve its taxation system and is continuing to refine the system.

It is interesting to note that the Tax Foundation ranked France as having the least competitive tax system with the US being ranked as 32nd out of the 34 countries.  A complete report and table can be found on www.taxfoundation.org/article/2004-ir.

Anyone thinking of establishing a business or a subsidiary of a business in New Zealand should contact Jeremy Carr – jac@burtonco.co.nz.