2025 guide on NZ Business Tax: Rates, Dates, Tax Obligations & more

Whether you’re a self-employed individual or running a large company, making sense of business tax in NZ is crucial to managing your finances, meeting compliance, and avoiding costly penalties.

If you’re wondering “how does business tax work in New Zealand?”, this blog is for you. We’ll cover specific business types and what they mean in terms of tax, tax rates, obligations, filing, due dates, and info on how to file business income tax in New Zealand.

Table of contents
Types of businesses and their tax obligations Calculating your business tax for filing: When to pay taxes on your business income? How to file business income tax return? Business tax for cross-border payments Wise Business - Streamline cross border transactions for tax filing

Types of businesses and their tax obligations

How much tax does a business pay? NZ resident companies are taxed on their business or corporate income, but the exact amount depends on the type of business.

Self-employed tax rate NZ

A self-employed person is an individual who earns income from their own work or trade, and not from an employer. They are often small business owners, contractors, or freelancers. Self-employed people don't always have to register a business name. However, they must pay tax, at the progressive rate for individuals¹.

The rates for self-employed tax NZ have changed for the 2025 tax year. From April 1, they will be as follows²:

• 10.5% tax rate for income between 0—$15,600
• 17.5% tax rate for income $15,601—$53,500
• 30% tax rate for income between $53,501—$78,100
• 33% tax rate for income between $78,101—$180,000
• 39% tax rate for income greater than $180,000

Self-employed income tax is paid on net profit, which is profit minus eligible expenses. Anyone earning over $60,000 a year must also register for Goods and Services Tax (GST) in New Zealand³.

Sole trader tax rate NZ

Self-employed individuals include sole traders. The two terms are often used interchangeably, but they mean slightly different things. Self-employment refers to the work status, while sole trading is the structure of the business.

Sole trader tax is the same as the rate for individuals in New Zealand³.

Online trading tax rate NZ

An online trading business sells products or services via websites, social media, and digital marketplaces. Anyone buying goods with the aim of making a profit must declare income and pay tax. There’s no minimum income threshold.

Online trading can be classed as four different business types in New Zealand: sole trader, partnership, company, trust or estate. The tax rate will depend on the business type⁴.

PIEs tax rate NZ

PIEs are portfolio investment entities that use money from individuals or companies to invest in assets like shares and bonds. These entities include managed funds, and foreign investment PIEs.

The PIE pays tax based on something called the Prescribed Investor Rate (PIR). For individuals, the PIR will depend on their income. However, companies investing in a PIE are taxed differently. Those based in New Zealand are classed as zero-rated and use a 0% PIR⁵. No tax is paid by the PIE, but the company must pay tax on income later as part of their annual tax obligations.

Direct seller tax rate NZ

Direct sellers sell goods to people as a distributor rather than in a typical retail environment. There are two types of distributor: commission agent and independent reseller. The tax rates for these can vary. They aren’t set and depend on business status and income.

You can find out how to pay tax as a distributor in NZ by completing the survey on the Inland Revenue website.

Company tax rate NZ

A company is a legal entity separate from its owners and shareholders in order to project the latter from personal liability. There are lots of company types with different corporate tax rates⁶. These include:

• Look-through companies (LTCs) are specific to New Zealand. It’s a tax structure that transfers income from the company to its shareholders.
• Qualifying companies are traditional companies with a unique tax status.
• Controlled foreign companies are companies that are run by New Zealand residents but based overseas.

ℹ️ What is corporate tax? Companies in New Zealand pay corporate tax, not income tax, as they are separate legal entities. The corporate tax rate is 28% on net income7.

Partnerships tax rate NZ

A partnership is a business structure where ownership is shared by at least two people. In this instance, income tax isn’t paid directly on business profits — though a tax return is filed. Instead, the business partners share the profits or losses and pay tax individually⁸.

The tax rates are based on each partner’s income at the rate for individuals.

Calculating your business tax for filing:

There are numerous business types and rates, but calculating your business tax in NZ is generally more straightforward. The same principle applies for nearly every business. Tax is paid on net income, which is overall income minus any allowable expenses or deductions.

Latest business tax rate in NZ

Tax rates aren’t set in stone. They change regularly due to factors including inflation, government policy adjustment, economic conditions, and tax reform.

Below is a summary of the NZ corporate tax rates for each business type for the 2025 tax year:

Business type	Rate
Self-employed	Tax rate for individuals
Sole trader	Tax rate for individuals
Most other businesses	28%
Non-profits	28%
Unincorporated organisations	Tax rate for individuals
Maori authorities	17.5%

Business tax deductions

Tax deductions are costs of running your business that you can claim back. As the name implies, deductions are subtracted from your gross income, and reduce the amount subject to taxation.

Eligible tax deductions can vary by business type. For the self-employed and sole traders, business expenses are tax deductible. These deductions include, but are not limited to:

• Business operating expenses - Rent, utilities, office supplies, business insurance, software subscriptions
• Travel expenses - Vehicle expenses linked to businesses use, public transports costs, airfare, accommodation, meals
• Employee costs - Salaries, wages, fees, superannuation, training
• Depreciation of assets - Decrease in value of vehicles, computers, office furniture
• Professional services - Accounting fees, legal fees, consulting fees
• Business supplies - Raw materials, inventory, packaging materials
• Interest and loan repayments - Interest on business loans and bank fees

When to pay taxes on your business income?

In New Zealand, the standard balance date is March 31 — the end of the financial year, but it might be different depending on your business type⁹. Tax accounting must cover a full year. Most businesses in New Zealand use the default tax year period from 1 April to 31 March.

However, this isn’t the day you have to pay taxes. Returns must be filed by 7 July, and the final tax deadline for payments is 7 February the next year¹⁰.

Balance dates for different industries in NZ

Some industries have different balance dates to the standard. This is to take into account factors such as seasonal fluctuations and industry norms.

Below are a few recognised balance dates for specific industries⁹:

Industry	Balance date
Childcare and education services	31 December
Meat processing or exporting	31 August or 30 September
Tobacco growing	31 July
Beekeeping	30 November or 31 December
Cattle farming	31 May

Industry balance dates are recognised but not definitive. You can apply to the Inland Revenue to change your balance date if you think it better reflects your income cycle or streamlines compliance. However, you must provide evidence that it’s warranted, and not simply a way to delay paying tax.

How to file business income tax return?

You can file your business income tax return online at the Inland Revenue website. Here’s a quick step-by-step guide for the process:

1. Gather your financial records to determine your income, expenses, assets and liabilities.
2. Navigate to myIR on the NZ Inland Revenue website
3. Log into your income tax account using your user ID and password
4. Select ‘file or amend a return’ from the homepage
5. Select the right income tax return form for your business type
   1. IR3 is for individuals including self-employed and sole traders
   2. IR4 is for companies
6. Calculate your taxable income and submit your tax return
7. Pay any tax owed before the due date to avoid any penalties

Business tax for cross-border payments

Cross border payments account for a significant share of all business transactions. Inland Revenue states that more than two-thirds of world trade involves multinational enterprises (MNEs) — companies that operate in more than one country¹¹.

Is money from overseas to New Zealand taxable?

Businesses in New Zealand are taxed on their worldwide income⁷. That means any money you have earned or received from suppliers and customers overseas is subject to taxation at the applicable corporate or income rate.

The main consideration is tax residency status. All NZ tax residents pay tax on worldwide income. Non-NZ residents are only taxed on income from New Zealand. Tax residency status is determined by Inland Revenue.

Avoiding double taxation on income from cross-border transactions

New Zealand has 41 double-taxation agreements (DTAs) in place to prevent businesses from being taxed twice on the same income¹². These treaties clarify which country has the right to tax income while helping businesses to reduce their tax burden.

If you’re a New Zealand tax resident, you can claim for a foreign tax credit if you’ve already paid tax on income in another country¹³. As this is a complex subject, you should talk to a legal professional to confirm your tax obligations.

Strategies to minimise my tax liability on cross-border transactions

To reduce your tax liability on cross border transactions, you can:

1. Understand your tax residency status
2. Keep clear records of all your cross-border transactions
3. Save costs on cross-border transactions
4. Apply for foreign tax credits where applicable
5. Work with a tax professional to structure payments efficiently

Wise Business - Streamline your cross border transactions for efficient tax filing

A Wise Business account lets users hold money in multiple currencies allowing businesses to manage their international finances with ease, reducing the complexity often associated with foreign exchange and tax reporting. Inflated currency exchange costs and hidden fees can increase your tax liabilities.

Moreover, Wise Business transfers money at the real exchange rate without hidden fees, maximizing transaction value and providing a clear financial picture for accurate tax reporting. Additionally, Wise Business lets you integrate with popular accounting software like Xero, Quickbooks, and more to automatically sync foreign currency transactions. This creates an audit trail for easier reporting after your balance date that can aid in remaining compliant with New Zealand's tax filing regulations.

What's more, you'll benefit from the following with a Wise Business account:

• Free to register — Hold and convert between 40+ currencies. Send to 140+ countries
• Debit and expense cards for you and your team, which you can use in 150+ countries
• Multi-user access for team members, with ways to control and manage permissions
• Pay up to 1,000 people at once with the Wise batch payments feature
• Integrate with your favourite cloud accounting solutions like Xero, Quickbooks, and more
• Get account details to receive in 23 currencies for a one-time fee of 40 NZD

Sign up for the Wise Business account! 🚀

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Sources:

1. Inland Revenue - Income tax for businesses and organizations
2. Inland Revenue - Tax rates for individuals
3. Inland Revenue - Roles - Self employed
4. Inland Revenue - Online trading tax implications
5. Inland Revenue - Income from portfolio investment
6. Inland Revenue - Income tax for companies
7. PWC - Taxes on corporate income
8. Inland Revenue - Income tax for partnerships.
9. Inland Revenue - Balance dates
10. Business Gov NZ - Income tax and provisional tax
11. Inland Revenue - International tax
12. Inland Revenue Tax Policy - Tax treaties
13. Inland Revenue Tax Policy - Role of double tax agreements.

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This publication is provided for general information purposes and does not constitute legal, tax or other professional advice from Wise US Inc. or its affiliates, and it is not intended as a substitute for obtaining business advice from a Certified Public Accountant (CPA).

This guide does not constitute tax advice. Get professional tax advice and guidance from your lawyer or tax advisor when selling your property.

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