New Zealand: Personal Taxation
Residence and Liability for Taxation
The tax residence rules determine whether a person is a New Zealand tax resident. A person is tax resident in New Zealand if he or she is in the country for more than 183 days in any 12-month period, or has a permanent place of abode in New Zealand.
A permanent place of abode covers all of a person’s ties and links in the country, and is described as whether there is an “enduring relationship” with New Zealand, which overrides any rules about the number of days a person is in New Zealand.
To decide whether there is an enduring relationship with New Zealand, factors to be considered include whether a person has access to property in New Zealand; a person’s social ties, including where an individual’s immediate family lives; and what economic ties a person has in New Zealand, including an individual’s business and employment situation.
A person becomes a non-resident if he or she is away from New Zealand for more than 325 days in any 12-month period, and no longer has an enduring relationship with New Zealand.
The worldwide income of a New Zealand tax resident is subject to tax. Persons who are not New Zealand tax residents are liable for New Zealand tax only on their New Zealand-sourced income.
The New Zealand tax year is from April 1 to March 31 of the following year. Any person required to pay tax in New Zealand will need to apply for an IRD number.
If a non-resident’s income from New Zealand is interest, dividends or royalties, from which the correct amount of non-resident withholding tax has been deducted, a tax return is not required to be filed.
The overseas income of individuals who are new migrants, or returning New Zealanders who have not been resident for tax purposes in New Zealand for at least 10 years, may qualify for a four-year temporary tax exemption.
There are also special rules for non-resident contractors and non-resident entertainers who earn income from New Zealand.