Gordon Campbell | Parliament TV | Parliament Today | Video | Questions Of the Day | Search


New tax rules for foreign owned banks

Hon Dr Michael Cullen Minister of Revenue

21 September 2004

New tax rules for foreign owned banks

The Government will introduce legislation to ensure foreign-owned banks operating in New Zealand pay enough tax on their New Zealand income, Revenue Minister Michael Cullen announced today.

“The New Zealand tax payments of foreign-owned banks have not appeared to reflect their reported profits in recent times,” Dr Cullen said. “I am advised that they are using certain features of our tax rules to pay less tax in New Zealand.”

“The legislative change should result in these banks paying around $360 million more a year in New Zealand tax,” Dr Cullen said.

For tax purposes, new rules specific to banks will deny them interest deductions if they do not hold a level of capital equivalent to four percent of their New Zealand banking assets, weighted for risk.

“If banks want full interest deductions for tax purposes, they will also be required to have enough capital in New Zealand to fully fund their offshore investments,” Dr Cullen explained.

Once the legislation is enacted, the situation will be monitored carefully to ensure that banks pay a level of tax appropriate to their New Zealand-sourced income and their worldwide operations.

The Government has consulted with the banking industry on the development of these proposals, with the result that many of the industry’s concerns about the new legislation have been addressed. The legislation will be included in a taxation bill to be introduced in November.


© Scoop Media

Parliament Headlines | Politics Headlines | Regional Headlines

BPS HYEFU WYSIWYG: Labour's Budget Plans, Families Package

“The BPS and the Treasury’s Half Year Economic and Fiscal Update show we can deliver our promises while running sustainable surpluses and paying down debt...

“Today we are announcing the full details of the Government’s Families Package. This is paid for by rejecting National’s tax cuts and instead targeting spending at those who need it most. It will lift 88,000 children out of poverty by 2021." More>>


Gordon Campbell: On Defence Spending, Alabama, And Dolly Parton

The spending lavished on Defence projects to meet the risks that could maybe, possibly, theoretically face New Zealand in future is breath-taking, given how successive governments have been reluctant to spend even a fraction of those amounts on the nation’s actual social needs. More>>


Members' Bills: End Of Life Choice Bill Passes First Reading

The End of Life Choice Bill in the name of David Seymour has been sent to a select committee for consideration by 76 votes to 44. It is the third time Parliament has voted on the issue in recent decades and the first time such a Bill has made it over the first hurdle. More>>


State Sector: MPI Survives Defrag Of Portfolios

The Ministry for Primary Industries will not be split under the new government, but will instead serve as an overarching body for four portfolio-based entities focused on fisheries, forestry, biosecurity and food safety. More>>


Gordon Campbell: On Vulnerable Kids, RNZ Funding, And Poppy

The decision to remove the word ‘vulnerable’ from the Ministry for Vulnerable Children could well mark a whole shift in approach to the care of children in need... More>>


Principals' Federation: End Of National Standards

Today the Minister of Education announced that the Government has stopped the controversial National Standards system of assessment and declared them an arbitrary measure which did not raise children's achievement as the previous Government intended. More>>


Public Good: People’s Report On Public Broadcasting And Media Presented

The People’s Commission on Public Broadcasting and Media, was crowdfunded and was informed by an extensive consultation, seeking the views of both those working in Media as well as gathering input both online and in person from ordinary Citizens. More>>





Featured InfoPages