NON-RESIDENT TAX STATUS NZ: HOW DO YOU KNOW?

If both countries or territories tax their residents on worldwide income you could be taxed twice on the same income. Double tax agreements (DTAs) have been negotiated between New Zealand and many other countries or territories to decide which country or territory has the first or sole right to tax specific types of income.”

Click here(opens in new tab) to see the current list of countries with whom NZ has a DTA.  Note that the arrangements vary from country to country, so you need to check out the specifics(opens in new tab).

Non-residency status

Non-residency means that you are taxed as a non-resident on any income derived here in NZ. These rates are significantly lower than normal tax rates, e.g. the non-resident tax rate for the United Kingdom is 10-15%.  See here(opens in new tab) for details

Are you non-resident for tax purposes?

Are you non-resident for tax purposes? It may not be as straightforward as you think (I’m not trying to rain on the parade here!).  Here’s what the IRD says:

For tax purposes you are a non-resident if you are away from New Zealand for more than 325 days in any 12-month period, and do not have an enduring relationship with New Zealand(opens in new tab).

So, how do you know if you have an enduring relationship with New Zealand?  Happily, IRD has published a guide to help you work it out(opens in new tab).  As with virtually everything, this is self-assessed and honesty-based.  Make sure that your conclusion is that of the hypothetical “reasonable person(opens in new tab).” See also this page(opens in new tab) at the IRD website, which contains a common example scenario, wherein someone lives in the UK but owns property in NZ

Tax return filing responsibilities

What are your tax return filing responsibilities? Let’s say that you work out that you are not tax-resident in New Zealand, and you own rental property here:

• If you live and work in Australia and own rental property here in New Zealand, see this article for info on tax losses and how they can be offset against your Australian income.
• If you live and work in the United Kingdom (UK) and own rental property here in New Zealand, see this article for info on tax losses and how they relate to your UK income.
• If you live and work in Malaysia or Singapore, we recommend that you talk to a local accountant who specialises in property and in international clients, if possible.  We have written to the tax departments of these countries and are currently awaiting their responses.  We will update this blog once we receive a reply.
• If you live and work in another country, we recommend that you talk to a local accountant who specialises in property and in international clients, if possible.

Other helpful links
What is my personal tax residency(opens in new tab)?
What income is taxable in New Zealand(opens in new tab)?
New Zealand tax residents with overseas interests(opens in new tab)
Top 10 facts on international tax(opens in new tab)

Need help?
Give us a call on 0800 890 132 or email us.