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NZ Legislates For Foreign Super, Mining Tax Changes

Wednesday, 22 May 2013   (0 Comments)
Posted by: Author: Mary Swire
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Source: Mary Swire (, Hong Kong)

The New Zealand Government has introduced legislation that will simplify the taxation of foreign superannuation funds and reform the tax treatment of certain metals.

If the Taxation (Annual Rates, Foreign Superannuation, and Remedial Matters) Bill passes, the foreign investment fund (FIF) rules will no longer apply to foreign superannuation schemes. Instead, lump sums will be taxed when they are withdrawn or transferred to a New Zealand or Australian scheme.

The amount of tax payable will depend on how long a taxpayer has been a New Zealand resident. The changes will enter into force from April 1, 2014.

Transitional arrangements will permit those transferring their interests into a KiwiSaver scheme to make a withdrawal from it to pay their tax bill. Those who complied with the FIF rules in relation to their foreign superannuation before the introduction of the legislation on May 20 will be able to choose to use the FIF rules after April, 2014. Finally, individuals who have made a lump-sum withdrawal or a transfer to another superannuation scheme between January 1, 2000 and March 31, 2014, but did not comply with their tax obligations at the time, will have an option to pay tax on only 15 percent of the lump sum amount.

The mining rules portion of the legislation is designed to more closely align the tax treatment of miners of specified minerals, including gold, silver and iron sands, with that of taxpayers more generally. It removes a number of tax deductions for expenditure that other taxpayers are required to capitalize and depreciate over the useful life of an asset.



Section 240A of the Tax Administration Act, 2011 (as amended) requires that all tax practitioners register with a recognized controlling body before 1 July 2013. It is a criminal offense to not register with both a recognized controlling body and SARS.

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