Rt Hon Sir William Birch

Minister of Finance

& Minister of Revenue

15 July 1999

For Immediate Release

DEEMED RATE OF RETURN FOR FOREIGN INVESTMENT FUND REGIME

The annual deemed rate of return used for the purposes of the foreign

investment fund (FIF) regime has been set by regulation, the Minister of

Finance and Revenue Sir William Birch announced today.

The rate for the 1998-99 income year has been set at 9.82%. The deemed

rate of return for future income years will continue to be set annually.

The FIF regime taxes the income earned by foreign entities on behalf of New

Zealand residents, where the controlled foreign company rules do not apply.

The deemed rate of return method is one of the four methods for calculating FIF

income or loss.

The rate of 9.82% will apply to all types of investments, including

interests in superannuation schemes and life insurance policies.

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