Frequently Asked Questions

Income

If I pay tax on my foreign income overseas is it correct that I don’t have to pay tax in New Zealand?

No, if you are a New Zealand tax resident you will still have to declare your overseas income to the New Zealand Inland Revenue. You can often claim a foreign tax credit to reduce your New Zealand tax. However, in some cases, you may have to reclaim the overseas tax from the other jurisdiction.

I don’t live in New Zealand so I shouldn’t pay any tax on income from New Zealand if I declare the income in my home country, is that right?

No, New Zealand generally has the right to apply its tax laws to income from sources in New Zealand.

Residence

I left New Zealand a few years ago so I must be a non-resident for tax purposes, mustn’t I?

Not necessarily, it isn’t just about your absence, it’s also about your ongoing connections to New Zealand. If you retain your home here you may potentially still be a tax resident.

I’m coming home after more than ten years away, can I get a transitional resident exemption?

In many cases yes, but often it’s crucial to establish exactly when you first became a non-resident to ensure you have actually met the 10 year test.

I’m a transitional resident, can my foreign currency account in New Zealand be exempt from tax?

No, this is still New Zealand sourced income even though it is not in New Zealand dollars. Any interest will be taxable and so will any fx gains.

Withholding tax

I know I’m supposed to withhold tax from payments I make to employees and certain contractors but if I get it wrong it’s okay because they will put it right on their tax returns, won’t they?

That may be the case, but as the payer the obligation to get it right still rests with you and you could therefore be exposed to interest (and penalties) for getting it wrong.

Tax returns

Does everyone in New Zealand file a tax return?

No, not everyone has to file returns but sometimes there can be advantages in doing so.

If you need help with your cross-border tax issues contact TaxBridge Limited for further information.

© TaxBridge Limited 2018

www.taxbridge.co.nz

PO Box 502, Whangaparaoa 0943

021 816541

This publication contains generic information only and TaxBridge Limited is not providing any specific advice. TaxBridge Limited is not responsible for any loss sustained by anyone relying on the contents of this publication. TaxBridge Limited recommends that specific taxation advice is sought for all matters covered by this publication.