NEW ZEALAND TAX RESIDENCE

  

 

You are a New Zealand tax resident if:

You are in New Zealand for more than 183 days in any twelve month period, or

 You have an enduring relationship with New Zealand, or

 You are away from New Zealand in the service of the New Zealand Government

The 183 days need not be consecutive.   If you are in New Zealand for only part of a day, this is counted as being a full day.   This means that the days on which you depart are treated as days present in New Zealand. 

To decide whether you have an enduring relationship with New Zealand, Inland Revenue Department looks at your circumstances, and in particular:

Presence in New Zealand- whether you are here continuously or from time to time

Accommodation- whether you own, lease or have access to property in New Zealand

Social ties- where your immediate family lives, or if you children being educated here, if you belong to any New Zealand clubs or organizations

Economic ties- if you have bank accounts, credit cards, investments, life insurance or superannuation funds here

Employment/ business- if you run a business here, or if you are employed here, if you have employment to return to,  the terms of any employment contract

Personal property- if you have vehicles, clothing, furniture and other property or possessions kept here permanently

Intentions- whether you intend to live in New Zealand or to return overseas after a time

Benefits, pensions or other payments- whether you receive any welfare benefits, pensions or other payments from New Zealand agencies or organizations.

 

DOUBLE TAX AGREEMENTS

You may be a tax resident in both New Zealand and another country.   This means that you are resident in two countries under the tax laws of each of these countries.   If both countries tax their residents on worldwide income you could be taxed twice on the same income.   Double tax agreements have been negotiated between New Zealand and many other countries to decide which country has the first or sole right to tax specific types of income.   These countries have double tax agreements with New Zealand: 

Australia

Belgium

Canada

China

Denmark

Fiji

Finland

France

Germany

India

Indonesia

Ireland

Italy

Japan

Korea

Malaysia

Norway

Philippines

Singapore

Sweden

Switzerland

Taiwan

Taiwan

Thailand

Netherlands

United Kingdom

United States of America

 

 If you are away from New Zealand for more than 325 Days in any 12 month period, you become a non resident if you do not have an enduring relationship with New Zealand.   The 325 days need not be consecutive.   If you are here for only part of a day it is counted as a whole day. 

If you are a New Zealand tax resident you are taxed on your worldwide income.   You must state your income from all sources. Including that from overseas, in an individual tax return (IR3).   You are normally allowed a tax credit for any tax paid overseas so you will need to be able to produce records which show the overseas tax you paid.   The New Zealand tax year is 1 April to 31 March, so you may need to apportion your overseas income to fit the New Zealand tax year. 

If you will no longer be a tax resident and will not be receiving income from New Zealand from the date you leave, you will need to complete an individual tax return up to the date of departure.   You can file your return before the end of the tax year.   Income you received from all sources to the date you leave New Zealand should be included in the return.   IRD will process the return quickly if they are aware that you are leaving New Zealand permanently.   You can state that you are leaving New Zealand permanently by filling in an IR 50 form and proof of departure and sending these with your return. 

 

PAYING TAX AS A NON RESIDENT

If you are a non resident you are taxed only on income you receive from a New Zealand source.   If your only income from New Zealand is interest, dividends, and the correct amount of non resident withholding tax (NRWT) is deducted, you will not need to file a non resident return.   The law is different for industrial royalties and interest paid to associated persons.   You will be required to file a non resident return if you receive such income. 

Let your bank know your overseas address and that you are non-resident.   This will make sure that the correct amount of NRWT is deducted. 

Any other income such as rental, business or farming income is subject to New Zealand tax at the normal rates.   You must include it in your non resident tax return. 

You should complete a non resident income tax return (IR 3NR) if you are non resident for the full year and you have continuing income from New Zealand. 

If you have been a non resident then return to New Zealand and become a tax resident again, you may need to request a personal tax summary or file an individual return covering the period from 1 April before your arrival to the end of the tax year, the following 31 March.   Contact IRD to clarify this.   If you are required to complete a tax return, include your New Zealand income earned while overseas and your worldwide income received after the date of your arrival for the income year.   Show clearly the breakdown of income you received before and after you arrived. 

 

RESIDENCE RULES FOR COMPANIES

A company is resident in New Zealand if it meets any one of the following criteria:

It is incorporated in New Zealand.

Itís directors exercise control in New Zealand

It has itís centre of management in New Zealand.   This is the place from where the company as a whole is managed on a day-to-day or regular basis

 It has itís head office in New Zealand

 

NOMINATING A REPRESENTATIVE

You are able to give someone else (such as a parent or friend) authority to act on your behalf while you are overseas. To do so you must advise IRD. 

Your representative can make enquiries on your behalf and all IRD correspondence can be sent to this person. 

You will still be responsible for your own tax affairs, so youíll need to make sure that any returns are filed and tax is paid by the due date.

 

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