New Zealand Tax System: Income Tax, Company Tax, GST and Exemptions

Updated 9 October 2026 | Amounts in New Zealand dollars (NZD)

New Zealand operates a relatively broad-based tax system administered primarily by Inland Revenue (IRD). Important taxes include personal income tax, company income tax, goods and services tax (GST), fringe benefit tax (FBT), and excise duties. Special rules apply to foreign income, tax residence, investments and property transactions.

Key features of the New Zealand taxation system

• No general inheritance or estate tax: New Zealand does not levy a general inheritance tax, although transactions involving estates may have other tax consequences.
• No comprehensive capital gains tax: Certain gains are nevertheless taxable, including some land disposals, trading gains and investment income.
• Local property rates: Councils levy rates on property; the system is not entirely free of local charges.
• No general payroll tax: Employers still have PAYE withholding, employer superannuation contribution tax and other obligations.
• No standalone general social security tax: KiwiSaver contributions and ACC levies can apply.
• ACC levies: Accident compensation is funded in part by levies on covered earnings and business activity.

Personal income tax rates

New Zealand applies progressive marginal tax rates. For the income tax year from 1 April 2026 to 31 March 2027, the general individual income tax brackets are:

Each marginal rate applies only to the portion of taxable income within that band. The rates exclude ACC earners' levies and do not account for individual tax credits. See IRD tax codes and rates and the IRD annual income tax calculator.

Company income tax

The standard New Zealand company income tax rate is 28% of taxable income. This generally applies regardless of the company's taxable income amount. Different rules and rates may apply to other entity types, including certain trusts and portfolio investment entities. Companies calculate taxable profits after applicable deductions and adjustments under the Income Tax Act 2007. See IRD income tax for businesses and organisations.

Goods and services tax (GST) and excise

The standard GST rate is 15% on most taxable supplies of goods and services. Some supplies are zero-rated or exempt. Businesses generally must register for GST when their taxable turnover reaches or is expected to reach the applicable registration threshold, commonly $60,000 in a 12-month period. See IRD GST guidance.

Excise duties and related charges apply to products such as alcohol, tobacco and certain fuels. These are separate from GST and depend on the product and relevant legislation.

Fringe benefit tax (FBT)

FBT is generally payable by employers on certain non-cash benefits provided to employees, such as private use of employer vehicles, subsidised loans and some insurance arrangements. The amount depends on the benefit, valuation rules and calculation method. The single-rate method may use 63.93%, while the alternate-rate method uses progressive rates, including 11.73%, 21.21%, 42.86%, 49.25% and 63.93% for the applicable remuneration bands. The old description of FBT as capped at 49.25% is therefore outdated. See IRD FBT calculation guidance.

ACC earners' levy

For 1 April 2026 to 31 March 2027, the ACC earners' levy is 1.75% of liable earnings up to the prescribed annual maximum of $156,641. Other ACC levies may apply to businesses and self-employed people. See IRD ACC levy rates.

Four-year transitional resident exemption

Qualifying new migrants and returning New Zealanders may receive a temporary exemption for many categories of foreign-sourced income for approximately 48 months. Eligibility depends on the statutory residence rules and prior New Zealand tax residence history. The exemption does not cover all overseas income: foreign employment and service income, for example, may remain taxable. New Zealand-sourced income generally remains taxable. Check the IRD international tax guidance for individuals before relying on the concession.

Double taxation agreements and foreign tax credits

New Zealand maintains a network of double taxation agreements (DTAs) to allocate taxing rights and help prevent the same income being taxed twice. Resident taxpayers may be entitled to foreign tax credits, subject to domestic limits and treaty rules. Treaty coverage and provisions differ by country; the historical claim of exactly 35 agreements should not be treated as current. See IRD double tax agreements.

Capital gains, property transactions and dividends

Although New Zealand does not impose a comprehensive capital gains tax, profits on certain property transactions can be taxable. For residential property sold on or after 1 July 2024, the bright-line test generally considers a two-year period, subject to exclusions and rollover relief. Other land-sale rules can apply even when the bright-line test does not. See IRD property tax rules.

Dividends are generally taxable to shareholders, with imputation credits potentially reducing double taxation of company profits. Foreign investments may be subject to foreign investment fund (FIF) or financial arrangement rules. The former assertion that taxation of gains and dividends applies only to foreign debt and investments is not correct.

Principal legislation and official resources

The Income Tax Act 2007 governs income tax and includes rules for taxable income, deductions, residence, land disposals, foreign income and credits. The Goods and Services Tax Act 1985 governs GST. The Tax Administration Act 1994 covers important administration and compliance obligations. The Accident Compensation Act 2001 underpins the ACC scheme. Consult the official New Zealand Legislation website for the current consolidated text and IRD Tax Policy for legislative developments.

Practical guidance

Individuals should verify their tax residency, tax code, foreign income treatment and eligibility for credits. Businesses should assess income tax, GST registration, PAYE, ACC, FBT and employer contribution obligations. Tax rates and thresholds can change through legislation, so use official guidance for the relevant tax year.

Disclaimer: This article provides general information and is not professional tax or legal advice.