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(May 25, 2010) On May 20, 2010, the New Zealand Government announced a number of changes to the tax system as part of Budget 2010, saying that the changes represent the "most significant tax reform package in New Zealand for nearly 25 years." (Press Release, Hon. Bill English & Hon. Peter Dunne, Tax Cuts Strengthen Economy and Help Families (May 20, 2010), available at http://www.beehive.govt.nz/release/tax+cuts+strengthen+economy+and+help
+families.)Key changes include:
- an increase in the Goods and Services Tax rate from 12.5% to 15%, effective from October 1, 2010;
- a reduction in the personal income tax rates for all income levels, including reducing the top tax rate from 38% to 33%, effective from October 1, 2010;
- a reduction in the company tax rate from 30% to 28% from the 2011/12 income year;
- a reduction in the top tax rate for portfolio investment entities, as well as the tax rate for unit trusts and superannuation funds, from 30 % to 28%;
- an end to the ability of landlords and businesses to claim depreciation on buildings with an estimated useful life of 50 years or more; and
- changes to the thin capitalization tax rules to limit the scope for foreign multinationals to reduce their New Zealand tax liability. (Id.)
"These tax changes are broadly fiscally neutral and will make New Zealand more competitive globally at a time when many other countries are increasing taxes to tackle rising debt from the global recession," Bill English and Peter Dunne, the Ministers of Finance and Revenue, respectively, said. (Id.)
A summary of the changes, as well as factsheets and links to budget documents and special reports, are available on a dedicated Budget 2010 Tax Guide website, at http://www.taxguide.govt.nz. A full list of links to all government announcements relating to Budget 2010 is available at http://www.beehive.govt.nz/feature/budget2010. (See also Budget 2010, New Zealand Government website, http://www.beehive.govt.nz/portfolio/budget+2010 (last visited May 21, 2010).)
- Author: Kelly Buchanan More by this author
- Topic: Taxation More on this topic
- Jurisdiction: New Zealand More about this jurisdiction
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Last updated: 05/25/2010