|
|
 |
|
New
Zealand
Legislation provides
incentive for high
earners to join super
plans
The revised Taxation Bill, which will
soon be approved by the New
Zealand parliament and pass into law,
contains tax incentives that are
designed to encourage high earners,
for instance, employees earning in
excess of NZ$60,000, to opt to look
for employer contributions to a
registered superannuation plan in
preference to salary enhancements.
The proposed measures, which look
set to be approved without further
amendment and which will take effect
from 31 July 2000, will allow a tax
advantage in that employer
contributions to such plans will be
taxed at 33% compared to the 39%
marginal tax rate on salary. Employees
will have to be careful to ensure that
they make this election and have it
documented before the relevant
income is earned, to avoid any
likelihood of the full marginal tax rate
being applied, as has happened in
Australia, for instance. A 5%
superannuation fund withdrawal tax
(FWT) will be imposed on some
withdrawals of employer contributions
but the exemptions provided under the legislation are so broad that FWT
is unlikely to be a major issue. The
Government's intention is that the tax
structure should modify behaviour
rather than generate tax income.
|
|
|
|
|
|
Contact Us 