Company Tax Calculator

New Zealand companies pay a flat corporate income tax rate of 28% on their net taxable profit. This rate has been unchanged since 2011 and applies to all New Zealand-resident companies regardless of their size or industry. The 28% rate is lower than the top personal income tax rate of 39%, which creates a potential tax deferral advantage for business owners who retain profits within a company rather than distributing them as salary or dividends. A "company" for tax purposes includes any incorporated body, including limited liability companies, cooperative companies, unit trusts structured as companies, and some other entities. Look-through companies (LTCs) and limited partnerships are exceptions — they are tax transparent and their income is attributed directly to owners at personal tax rates. New Zealand does not have a separate small business tax rate. Source: IRD — Companies (ird.govt.nz/income-tax/business-and-organisations/companies).

A New Zealand company must pay provisional tax when its residual income tax (RIT) for the year is more than $5,000 — the same threshold that applies to individuals. RIT is the company's income tax liability after deducting any credits such as imputation credits or tax already paid at source. For companies with a standard 31 March balance date, the three provisional tax instalment dates are 28 August, 15 January, and 7 May. Companies using the standard uplift method pay 105% of the prior year's RIT in three equal instalments. Large companies (those with RIT over $60,000) are not protected by the safe-harbour rule and must pay accurate instalments to avoid use-of-money interest (UOMI). Companies can also use the estimation method if they anticipate significantly different profits compared to the prior year. Terminal tax (any balance remaining) is due on 7 April for companies with a standard balance date. Source: IRD — Provisional Tax for Companies (ird.govt.nz/income-tax/provisional-tax).

Imputation credits are tax credits attached to dividends paid by New Zealand companies, representing the income tax already paid by the company on those profits. When a company earns $100 profit and pays 28% ($28) company tax, it has $72 remaining to distribute. If it pays a fully imputed dividend of $72, it attaches $28 of imputation credits. The shareholder receives $72 cash plus a $28 imputation credit, grossing up the dividend to $100. The shareholder includes the gross $100 in their income and pays tax at their personal rate — but the $28 imputation credit offsets the tax already paid. This prevents double taxation: the profit is only taxed once at the company level, and then adjusted for any difference in personal tax rates. If a shareholder's personal rate is 33%, they pay an additional 5% ($5) on the gross dividend. Imputation credits cannot exceed the 28% company tax rate. Source: IRD — Imputation Credits (ird.govt.nz/income-tax/business-and-organisations/companies).

A look-through company (LTC) is a special tax structure in New Zealand where the company is treated as tax transparent — its income, deductions, losses, and tax credits flow through directly to the shareholders, who pay tax at their personal income tax rates. This contrasts with a standard company where income is taxed at the flat 28% company rate. An LTC must be a New Zealand-resident company with five or fewer look-through counted owners (natural persons or certain trustees), and all owners must elect LTC status by filing form IR862 with Inland Revenue. LTCs are popular for rental properties and small businesses because losses can be offset against other income at the owner's personal rate. However, deductible amounts are limited to the owner's "amount at risk" — the capital they have contributed or have on the line. LTC status can also be exited if it no longer suits the business. Source: IRD — Look-Through Companies (ird.govt.nz/income-tax/business-and-organisations/companies).