Trans-Tasman imputation and the company tax rate change
Background
In its 2010 Budget, the New Zealand Government reduced the income tax rate for companies from 30% to 28%. This change affects all entities who pay tax at the company tax rate. (See Taxing companies for a list of these entities.)
What changes apply for Trans-Tasman imputation?
New Zealand companies distributing imputed dividends to shareholders must deduct any further RWT needed to bring the total tax component up to 33% of the gross dividend amount. However, Australian companies maintaining a NZ imputation credit account have no responsibility to deduct RWT from dividends to New Zealand shareholders. Instead, when the New Zealand shareholder completes their annual tax return, they will be liable for the remaining tax due on that income.
All other changes described in the IR237 fact sheet have the same effects on Australian companies and shareholders as they do on New Zealand companies and shareholders.
Detailed information
- Key messages about the change of company tax rate for a summary
- Imputation and the company tax rate change fact sheet (IR237) for full details - see Forms and guides
- Imputation guide (IR274) for information about imputation generally - see Forms and guides
Date published: 03 Sep 2010
Back to top