19 Nov 2011

Labour would consider lower tax on royalties for some firms

7:17 pm on 19 November 2011

The Labour Party says it would reduce the tax on overseas royalties earned by New Zealand-based firms to keep them in the country.

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The party launched its economic development policy in Auckland on Friday.

Economic development spokesperson David Parker says firms based on intellectual property, such as software companies or firms with a patented invention, can operate from anywhere in the world.

Mr Parker believes too many are moving overseas to take advantage of lower tax rates.

By lowering the tax rate on overseas royalties, intellectual property-based firms are more likely to stay in New Zealand and, ironically, the tax take from them would be improved, he says.