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CW 58: Disposal of companies’ own shares
or “Companies don't pay tax when selling their own shares”
You could also call this:

“Tax exemptions for NZ companies doing business in Niue”

You don’t have to pay tax on money your company makes if it’s set up in New Zealand but does most of its business in Niue. This is called exempt income. However, this rule doesn’t apply if your company is controlled by people from other countries.

If your company makes most of its money in Niue, you also don’t have to pay tax on the dividends it gives out. But there are some exceptions. You still have to pay tax if you live in New Zealand, if your company is controlled by people from other countries, or if you’re part of a trust where someone lives in New Zealand.

Your company can also get tax-free income from a special business in Niue if the government says it’s a ‘development project’. This project needs to be important for Niue’s growth. The government can make this decision official by publishing it as a law.

These rules don’t apply to money your company makes in New Zealand. They also don’t change other rules about foreign companies and investments.

If your company gets this special tax treatment, other countries might still see it as a foreign company when they look at their investment rules.

The government can decide that a business is helping Niue grow by making an official order. This order becomes a law that everyone can see.

This text is automatically generated. It might be out of date or be missing some parts. Find out more about how we do this.

Next up: CW 59B: Income of and distributions by certain international funds

or “Tax-free income and distributions from Niue and Tokelau international trust funds”
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Part C Income
Exempt income

CW 59New Zealand companies operating in Niue

  1. An amount of income derived by a company incorporated in New Zealand that derives its income wholly or mainly from Niue is exempt income.

  2. Subsection (1) does not apply if the company, if it were a foreign company, would at any time during the income year in which the amount is derived be a controlled foreign company.

  3. A dividend derived from a company incorporated in New Zealand that derives its income wholly or mainly from Niue is exempt income, unless the dividend is derived by—

  4. a person who is resident in New Zealand; or
    1. a company that is a controlled foreign company at any time during the income year in which the amount is derived; or
      1. a trustee of a trust of which a settlor or beneficiary is resident in New Zealand during the income year in which the amount is derived.

        1. An amount of income derived by a company incorporated in New Zealand from a business or enterprise that the company carries on in Niue is exempt income if—

        2. the business or enterprise is declared by an Order in Council made under subsection (7) to be a development project for the purposes of this section; and
          1. the company’s income is derived wholly or mainly from that business or enterprise; and
            1. the amount is derived from sources in Niue; and
              1. the amount is derived while the Order in Council is in force.

                1. Subsections (1), (3), and (4) do not apply to—

                2. an amount of income derived from sources in New Zealand; or
                  1. a dividend, to the extent to which it constitutes distribution of an amount derived by the company from sources in New Zealand.

                    1. This section does not restrict the application of section CQ 1 (Attributed controlled foreign company income), or CQ 4 (Foreign investment fund income), or the FIF rules. For the purposes of the FIF rules, a company that derives its income wholly or mainly from Niue and has exempt income under subsection (1) is treated as a foreign company.

                    2. The Governor-General may make an Order in Council declaring a business or enterprise to be a development project for the purposes of this section if satisfied that the business or enterprise—

                    3. has been or will be entered upon wholly or mainly for the purpose of developing Niue; or
                      1. is or will be important in the development of Niue.

                        1. An Order in Council under this section is secondary legislation (see Part 3 of the Legislation Act 2019 for publication requirements).

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                        Notes
                        • Section CW 59(8) heading: inserted, on , by section 3 of the Secondary Legislation Act 2021 (2021 No 7).
                        • Section CW 59(8): inserted, on , by section 3 of the Secondary Legislation Act 2021 (2021 No 7).