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Lizard
10-11-2007, 07:47 AM
The proposed changes to company tax to allow for an exemption on active overseas income from controlled foreign companies seem positive.

Media Release - 12 October (http://www.taxpolicy.ird.govt.nz/index.php?view=548)

IRD Issues Paper (http://www.taxpolicy.ird.govt.nz/publications/files/intnlip1.pdf)

I'm weak on tax knowledge, but I'm interested in any comments as to the extent to which this could effect company earnings on our listed companies?

(If this topic has been covered elsewhere on ST, please re-direct me.)

mamos
10-11-2007, 11:18 AM
I havn’t had a look at the proposals yet, but NZ companies that have had active investments (factories etc) in overseas countries (non-grey list) have been at a competitive disadvantage compared to their overseas counterparts with similar investments.

From what someone said in my tax class at uni, repatriated dividends will also be treated as exempt income. This is different to other countries that operate a deferral system, which tax the repatriated dividends that arise from active operations.