New Zealand: Proposed tax changes for “close-companies”

Tax proposals for New Zealand close-companies

An “issues paper” in New Zealand includes suggested changes to the current tax rules for “close-companies” (privately owned companies with five or fewer shareholders). As proposed, the amendments would: (1) remove restrictions on expense deductibility under the “look-through company” (LTC) tax rules; (2) strengthen entry requirements to become an LTC; (3) remove the “tainting” of capital gains made with associates; and (4) remove withholding tax on dividends paid to shareholders in a number of circumstances.


Related content

The changes are the result of a broad review of the close-company tax rules by Inland Revenue Officials, and are generally viewed as being “taxpayer friendly.” However, not all of the changes are positive. For example, there would be additional restrictions on trust shareholders in LTCs, while existing qualifying companies would lose this tax status in a change of ownership.

New Zealand's many privately owned businesses will have to 16 October 2015 to review the 68-page issues paper and submit comments.


Read a September 2015 report [PDF 559 KB] prepared by the KPMG member firm in New Zealand: Close-company tax changes

The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.

Connect with us


Request for proposal



KPMG's new digital platform

KPMG International has created a state of the art digital platform that enhances your experience, optimized to discover new and related content.