Have been away for awhile, but have come back to see a number of posts and questions regarding the above referenced subject. since I tend to get lost on who is posing the question and who is providing the answer, I though it better to add my own post rather then hit the reply button.
The following answers are all from the perspective of a U.S. investor governed by our taxation laws.
Q. Is anyone on the forum a non-resident investor. A. Yes. At the very least me. While others may not be plugged into the forum, I've got to believe there are other investors traveling in my boat.
Q. Can anyone name another country that gives tax paid back to foreign investors. A. Yes, Australia. We do get the imputation credits from Australia. It works out (for us) to be exactly equal to the supplemental payments that is sometimes provided by NZ co's.
Q. How much tax do you show on your income tax return. A. We must show the full amount of the dividend plus the supplemental payment.
Q. Overseas investors are simply repatriating the dividend money back offshore -- (and not) -- helping the local economy bubble along. A. When I receive a dividend it goes in a Bank of New Zealand account held for additional future investments. On my last two trips to NZ, I withdrew some money to spend while I was in NZ and thereby helped the economy bubble along. It also makes more sense to leave the money in NZ dollars and not incur currency commissions on each transaction.
Q. Is government policy contributing to the shortage of investment capital available in NZ. A. To the contrary. This situation makes it more likley that foreign capital will be attracted to the NZ capital markets thereby increasing the overall size and liquidity of the markets. A goal which has been continually sought by many Kiwi's.
Q. Why are NZ co's so intent on giving higher payouts to overseas investors, at the expense of the hapless home market investor? A. I think this has already been answered by another contributor, but I will say that what it does is treat overseas investors just as a Kiwi would be treated on the identical investment. In other words it evens things up for the overseas investor since NZ does not give imputation credits to us. (as Australia does for U.S. investors)
I hope this has been informative, at least it gives a perspective from a U.S. overseas investor and one that has been helping the NZ economy for a number of years now.
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