Finance

Taxation

Taxation in New Zealand

New Zealand has a relatively simple, low-cost tax system compared to other countries.

The following information is intended as a guide only. Professional advice should be sought prior to commitment to production, as the application of the tax rules will be facts specific and dependent on individual circumstances. In addition, tax laws may change; the information contained in this guide is only up to date as at the date of publication.

Please contact Film New Zealand to facilitate access to professional advice, or visit the screen production section of the Inland Revenue Department's website.

Summary of Key Taxes & Rates

Goods and Services Tax (GST)

Applies to all taxpayers making in aggregate more than $NZ40,000 of supplies in New Zealand in any 12 month period

12.5% on the value of the supply (excluding financial services, domestic accommodation)

0% for goods and services exported

All productions will incur GST on New Zealand costs that can be claimed back when GST registered.

Corporate Tax Obligations

The income tax rate is 33% of world-wide taxable income, net of allowable deductions, for companies tax resident in New Zealand, or if non-resident where income is sourced from New Zealand (lower than that of Japan, United States and Canada)

Double Taxation Agreements may provide relief in some circumstances

As most NZ crews are self-employed and take care of their own taxes, there are no compulsory fringe benefit tax obligations. Withholding obligations are noted below

Withholding tax will apply to all actors and performers

Withholding tax will apply to technicians unless they have an exemption certificate

Withholding tax may apply to non-resident crew

Withholding tax may apply to payments to non-residents for the use of equipment.

Personal Tax Obligations

The income tax rate for individuals is 39% to the extent taxable income, net of allowable deductions, is over NZ$60,000 for New Zealand tax residents or if non-resident where income is sourced from New Zealand

Progressive tax rates (19.5% to 33%) apply for taxable income under this amount

No tax free thresholds

Double Tax Agreements may provide relief in some circumstances

The withholding tax deducted by the production company for non resident actors and performers is usually a final tax.

Incentives To Film In New Zealand

Explicit Incentives

The New Zealand government has specific incentives available for the film industry. Large budget screen production grants will be exempt from tax.

For more details on this incentive, please visit our Large Budget Screen Production Grant Scheme page.

Implicit Incentives

New Zealand government policy has created a further incentive through an open, deregulated economy. This provides overseas investors with a stable, competitive, transparent, low cost business environment in which to invest for the long term.

There are a number of other financial benefits:

It has been estimated that New Zealand production costs are 20% cheaper than Australia and 32% cheaper than Canada, after any tax incentives or rebate schemes in those territories are taken into account, and prior to the effect of New Zealand's tax exemption for large budget screen production grants. The flexible, deregulated and highly creative New Zealand production environment makes your dollar go further.

The exchange rate effectively extends a project's budget. One New Zealand dollar has the same purchasing power as one US dollar. One New Zealand dollar is worth between USD$0.60 and USD$0.75. Click here for today's exchange rate.

New Zealand is a non-SAG country, thus relieving producers of overseas industry union issues.

Taxation Principles

New Zealand has

a broad-based tax regime, designed to be comprehensive with few exemptions and incentives

no sales, regional or state taxes

no explicit capital gains tax

New Zealand operates under a self-assessment tax regime, whereby taxpayers are responsible for calculating their own tax obligations, paying the tax to the Inland Revenue and filing their tax returns. The self-assessment regime is buttressed by audit activity, and a stringent penalties regime (including penalties for late payment of tax, not taking sufficient care and having technically incorrect tax positions). It is critical that productions undertaken in New Zealand get their tax obligations correct to avoid unexpected additional costs.

Goods and Services Tax

GST is a value added tax levied at 12.5% on the supply of goods and services in New Zealand. Financial services (primarily debt and equity instruments) and domestic accommodation are exempt from GST.

GST is charged at 0% on the export of goods and services.

GST is intended to be a tax on the end user of goods and services. Therefore businesses that incur GST in the course of making their taxable supplies can claim back that GST from the Inland Revenue. All productions will incur GST on supplies received. Productions will be required to register for GST in order to claim back this GST cost, thereby effectively neutralising the effect of GST on the cost of production.

Income Tax

New Zealand's year for income tax purposes is 1 April to 31 March. In certain circumstances approval may be obtained from the Inland Revenue to use a different balance date, such as to align with that used in a foreign jurisdiction.

Income tax is charged on the world-wide taxable income, net of allowable deductions,