Auckland
Taxes and Fees
An overview of Goods and Services Tax (GST) in New Zealand and other fees relevant to purchases.
Sections
1. Income Tax
Income tax in New Zealand is levied on individuals and businesses. The Inland Revenue Department (IRD) is responsible for administering and collecting taxes.
For Individuals:
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Tax Residency:
- You are considered a tax resident if you stay in New Zealand for more than 183 days in any 12-month period or if you have a permanent place of abode in the country.
- Non-residents are taxed only on their New Zealand-sourced income.
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Income Tax Rates (2023):
- 0% on income up to $14,000 NZD.
- 10.5% on income between $14,001 and $48,000 NZD.
- 17.5% on income between $48,001 and $70,000 NZD.
- 30% on income between $70,001 and $180,000 NZD.
- 39% on income over $180,000 NZD.
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Tax Code: When starting a job, youโll need to provide your employer with your tax code, which determines how much tax is deducted from your salary. This is done using the IRDโs forms.
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Filing Taxes:
- Most employees do not need to file a tax return as taxes are deducted at source through the Pay As You Earn (PAYE) system.
- If you have additional income (e.g., from investments or rental properties), you may need to file an Individual Income Tax Return (IR3).
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Payment Procedure:
- Taxes are automatically deducted from your salary by your employer.
- For self-employed individuals or those with additional income, payments can be made online through the IRDโs website or via bank transfer.
For Businesses:
- Corporate Tax Rate: 28% on profits.
- Provisional Tax: Businesses may need to pay tax in installments throughout the year if their income is not taxed at source.
Tips:
- Apply for an IRD number as soon as you arrive in New Zealand. This is essential for working and paying taxes. You can apply online or at a local PostShop.
- Use the IRDโs online services (myIR) to track your tax obligations and payments.
2. Goods and Services Tax (GST)
GST is a value-added tax applied to most goods and services in New Zealand, including in Auckland.
- Rate: 15%.
- Applicability: GST is included in the price of most goods and services, so you donโt need to calculate it separately.
- Exemptions: Certain financial services and residential rent are exempt from GST.
- For Visitors:
- Unlike some countries, New Zealand does not offer a GST refund for tourists on goods purchased locally.
Tips:
- When budgeting, remember that prices displayed in stores and restaurants usually include GST.
- If youโre starting a business, you must register for GST if your turnover exceeds $60,000 NZD per year.
3. Property-Related Taxes and Fees
If you plan to buy or rent property in Auckland, there are specific taxes and fees to consider.
For Home Buyers:
- Bright-Line Test (Capital Gains Tax):
- If you sell a residential property within 10 years of purchase (5 years for properties purchased between March 29, 2018, and March 26, 2021), you may need to pay tax on any profit made. This does not apply to your primary residence.
- Stamp Duty: New Zealand does not have stamp duty on property purchases.
For Renters:
- There are no specific taxes on renting, but landlords may pass on costs like property maintenance or rates indirectly through rent.
Local Council Rates:
- Property owners in Auckland must pay annual council rates, which fund local services like waste collection and public infrastructure.
- Rates vary depending on the propertyโs value and location but typically range from $2,500 to $4,000 NZD per year.
4. Other Taxes and Fees
Fuel Tax:
- Auckland has a regional fuel tax of 10 cents per litre, in addition to the national fuel excise tax. This is included in the price at the pump.
Road User Charges (RUC):
- If you drive a diesel vehicle, youโll need to pay RUC, which is based on the distance traveled. The cost is approximately $76 NZD per 1,000 km for light vehicles.
Airport Fees:
- Auckland Airport charges an International Passenger Service Charge, which is usually included in your ticket price. This fee is approximately $25 NZD for departing international passengers.
KiwiSaver Contributions:
- If you work in New Zealand, you may be enrolled in KiwiSaver, a voluntary retirement savings scheme. Contributions are deducted from your salary at a rate of 3%, 4%, 6%, 8%, or 10%, depending on your choice. Employers also contribute at least 3%.
5. Considerations for Visitors and Immigrants
Visitors:
- Short-term visitors are generally not subject to income tax unless they earn income in New Zealand.
- Be aware of GST when making purchases, as it is included in the price and non-refundable.
Immigrants:
- New tax residents may qualify for a four-year transitional tax residency exemption, which means you wonโt be taxed on most foreign-sourced income during this period. However, New Zealand-sourced income is still taxable.
- If youโre moving to New Zealand permanently, consult a tax advisor to understand your obligations, especially if you have overseas assets or income.
6. Payment Methods and Deadlines
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Payment Methods:
- Online via the IRDโs website (myIR).
- Bank transfer or direct debit.
- In-person at a Westpac bank branch.
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Deadlines:
- Income tax for individuals is typically due by July 7 of the following tax year unless you have an extension.
- Provisional tax payments for businesses are due in installments throughout the year.
7. Tips for Managing Taxes and Fees
- Keep Records: Maintain detailed records of your income, expenses, and any tax-deductible items.
- Use Online Tools: The IRDโs website offers calculators and tools to help you estimate your tax obligations.
- Seek Professional Advice: If youโre unsure about your tax situation, consult a tax advisor or accountant familiar with New Zealandโs tax laws.
- Plan for GST: If youโre starting a business, factor GST into your pricing and cash flow planning.
By understanding these taxes and fees, youโll be better prepared to navigate Aucklandโs financial landscape, whether youโre visiting, working, or settling down. Let me know if youโd like further clarification or assistance!