New Zealand: May 2023 Tax Bill includes Pillar Two global minimum tax rules
The bill, once enacted, would become effective 1 July 2023.
The bill includes Pillar Two global minimum tax rules
The government has tabled two tax bills:
- Taxation (annual rates for 2023–2024, multinational tax, and remedial matters) Bill (May 2023 Tax Bill)
- Taxation Principles Reporting Bill
Both bills have been referred to the Finance and Expenditure Select Committee, with submission due dates shorter than the normal six-week process.
- Submissions on the May 2023 Tax Bill are requested by 16 June 2023.
- Submissions on the Tax Principles Reporting Bill are requested by 9 June 2023.
May 2023 Tax Bill
Key changes in the May 2023 Tax Bill include:
- OECD Pillar Two global minimum tax rules
- 39% trust tax rate
- Additional North Inland flood tax relief measures
The trust tax rate measure was also included in the 2023 budget released on 18 May 2023. Read TaxNewsFlash
Tax Principles Reporting Bill
Originally proposed by the Minister of Revenue in April 2022, the bill proposes a set of principles against which the tax system might be measured and requires Inland Revenue to report on those measurements on an annual basis:
- Horizontal equity
- Efficiency
- Vertical equity
- Revenue integrity
- Compliance and administrative costs
- Certainty and predictability
- Flexibility and adaptability
The proposed approved “taxation principles measurements” are:
- Income distribution and income tax paid
- Distribution of exemptions from tax and lower rates of taxation
- Perceptions of the integrity of the tax system
- Compliance with the law by taxpayers
The bill, once enacted, would become effective 1 July 2023.
Read a May 2023 report prepared by the KPMG member firm in New Zealand
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