NZ on way to international tax reform

New Zealand
came a step closer to tax reform this week as it entered the third round of
consultation on the reform of its international tax rules following the release
of an issues paper proposing changes to the treatment of foreign dividends.

Finance minister Michael Cullen and revenue minister Peter Dunne said
everything was ‘on track’ for the May introduction of a bill which would pave
way for reform of NZ companies’ taxation of offshore subsidiaries.

Apart from its focus on the taxation of dividends received by NZ companies
from overseas subsidiaries, the issues paper also looks at transitions and
consequences resulting from the change to active income exemption, including the
repeal of conduit rules and treatment of existing foreign losses and foreign tax
credits, according to

The ministers said the current tax system was out of line with the tax
systems of other countries, particularly Australia, which made it difficult for
NZ businesses with overseas operations to compete effectively with similar
businesses in other countries.

Further reading:

ICAEW FD survey shows need for fewer rules

Related reading