22 February 2005

Impediment to venture capital investment lifted

Non-residents who invest into New Zealand companies alongside the New Zealand Venture Investment Fund will be exempt from tax on the profits when they later sell their shares in those companies under changes planned by the government.

Revenue Minister Michael Cullen said that a cornerstone of the government’s Growth and Innovation Framework was that the tax system should not act as an impediment to New Zealand enterprises getting the capital they need to grow.

“The change will complement the venture capital tax reforms enacted last year to remove tax barriers to New Zealand companies attracting private equity and venture capital from institutional investors in specific countries.

“The exemption will be included in the next taxation bill and will be limited to non-residents who sell shares in New Zealand companies into which the Venture Investment fund has invested, or committed to invest on or before 31 March 2008,” Dr Cullen said.

ENDS

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