• 1. Freight tax

Freight tax

Income Tax: 28% of taxable income, which is considered to be 5% of the gross amount earned by a non-resident shipping operator from shipping merchandise, goods, livestock, mail or passengers from a New Zealand port to a foreign port (= 1.4%)

 

Exemption Agreements
New Zealand has concluded double taxation agreements with the following countries granting residents full exemption unless otherwise noted.

Country   Date of entry into force   Date of effect
Australia (Renegotiated) 19/03/2010 01/04/2010
Austria   01/12/2007   01/04/2008
Belgium 1, 2   08/12/1983   01/04/1984
Canada   29/05/1981   01/04/1976
Canada (Renegotiated) 26/06/2015 01/08/2015 Withholding
01/04/2016 Other
Chile   21/06/2006   01/04/2007
China 3  17/12/1986   01/04/1987
China 4   15/12/1997   01/04/1998
China 5 09/11/2011 01/04/2012
Czech Republic 29/08/2008 01/04/2009
Denmark   22/06/1981   01/04/1981
Fiji   11/02/1977   01/04/1976
Finland   22/09/1984   01/04/1985
France 6   19/03/1981   01/04/1982
Germany   21/12/1980   01/04/1978
India 7   03/12/1986   01/04/1987
Indonesia   23/06/1988   01/04/1989
Ireland   29/09/1988   01/04/1989
Italy   23/03/1983   01/04/1978
Japan 7   19/04/1963   01/04/1963
Japan (Renegotiated) 25/10/2013 01/01/2014 Withholding
01/04/2014 Other
Korea, Republic of   22/04/1983   01/04/1981
Malaysia   02/09/1976   01/04/1974
Mexico   16/06/2007   01/04/2008
The Netherlands   18/03/1981   01/04/1979
Norway   31/03/1983   01/04/1982
Papua New Guinea 21/01/2014 01/03/2014 Withholding
01/04/2014 Other
The Philippines 8   14/05/1981   01/04/1981
Poland   16/08/2006   01/04/2007
Russia   04/07/2003   01/04/2004
Samoa 23/12/2015 01/02/2016 Withholding
01/04/2016 Other
Singapore (Renegotiated) 12/08/2010 01/10/2010 Withholding
01/04/2011 Other
South Africa   23/07/2004   01/04/2005
Spain 1  31/07/2006   01/04/2007
Sweden   14/11/1980   01/04/1981
Switzerland   21/11/1981   01/04/1981
Thailand 14/12/1998   01/04/1999
Turkey 28/07/2011 01/01/2012 Withholding
01/04/2012 Other
United Arab Emirates   29/07/2004   01/04/2005
United Kingdom   16/03/1984   01/04/1984
United States   02/11/1983   01/04/1984
Vietnam 05/05/2014 01/01/2015 Withholding
01/04/2015 Other
     
Comprehensive treaty negotiations currently in progress:
 
Signed but not in force
Belgium (Protocol) Signed 07/12/2009  
     
In the process of negotiation or finalised but not signed
Austria (Protocol)    
Belgium (Protocol)    
China (Renegotiation)    
India (Protocol)    
Luxembourg    
Netherlands (Protocol)    
Norway (Renegotiation)    
Portugal    
United Kingdom (Renegotiation)    
     
 
Reciprocity
The Tax Commissioner may exempt from tax a non-resident shipping operator, who is resident in a country with which a double taxation agreement is not held, when he is satisfied that in corresponding circumstances a New Zealand resident shipping operator would not be liable to income tax in the non-resident shipping operator's country of residence.
 
Exemption on the basis of reciprocity has been established for residents of the following countries:
     
Barbados Israel Panama
Bermuda Liberia Papua New Guinea
Brazil Netherlands Antilles Tonga
Greece New Caledonia Vanuatu
     
Others may be exempted in this manner on a case by case basis.
       
Notes:    
   
1. The treaty is based on the country where the effective management of the shipping enterprise is situated.
   
2. If the place of effective management of a shipping enterprise is aboard a ship, then it shall be deemed to be situated in the Contracting State in which the home harbour of the ship is situated, or, if there is no such home harbour, in the Contracting State of which the operator of the ship is a resident.
   
3. Treaty does not apply to residents of Hong Kong, SAR or Taiwan, Province of China.
   
4. Treaty only applies to residents of Taiwan, Province of China.
   
5. Treaty only applies to residents of Hong Kong, SAR.
   
6. Article 27 of the double taxation agreement states that its territorial scope, in the case of France, includes "the European and Overseas Departments of the French Republic". Inland Revenue's Public Information Bulletin No.112, supplement No.5, published in August 1982, lists the European and Overseas Departments of the French Republic as:

Guadeloupe; Guyane; Martinique; Reunion; and Saint Pierre-et-Miquelon.

The European and Overseas Departments of the French Republic does not include France's Overseas Territories, such as Tahiti and New Caledonia.
   
7. 50% reduction
   
8. The total tax payable by residents of The Philippines is reduced to 1.5% of the gross outward freight.
   

Remarks:
None

 

Reference:

Extract from the Income Tax Act 2007

Section CV 16Non-resident shippers

(1) When this section applies
This section applies when a ship that belongs to, or is chartered by, a non-resident person carries outside New Zealand cargo, mail, or passengers shipped or embarked in New Zealand.

(2) Amount of income
Five percent of the amount payable to the person for the carriage, whether payable inside or outside New Zealand, is treated as income of the person.

(3) Exemption
Despite subsection (2), the Commissioner may determine that some or all of an amount that would otherwise be income of a person under this section is a foreign-sourced amount.

(4) Place of shipping
In this section, cargo, mail, or passengers shipped or embarked at a port in New Zealand for carriage outside New Zealand are treated as carried outside New Zealand from that port, even though the ship may call at another port in New Zealand before finally leaving New Zealand.

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