Types and definitions of contracts

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Types and definitions of contracts

Contract activity or service

"Contract activity or service" has a very broad and expansive meaning as defined in section YA1 of the Income Tax Act 2007 (the Act). In relation to a non-resident contractor, it states:

performing any work in New Zealand
rendering a service of any kind in New Zealand
providing the use of, or right to use, in New Zealand, any personal property or services of any person other than the non-resident contractor.

There are few activities that do not meet the definition of non-resident contractor "contract activity or service".

The Act does not apply to any contract activity by a non-resident contractor performed outside New Zealand.

Please contact us if you are unsure whether the nature of the services provided by a non-resident contractor comes within the definition of "contract activity or service”.

The term "contract activity or service” is not limited to the following examples:

advisory
analytical
architectural
consultancy
designing
diving
drilling
engineering
inspection
management
procurement
professional
scientific
surveying
technical, or
weather forecasting service, and
any service in respect of or in relation to any feasibility, financial, or marketing study or evaluation.

Contract payment

"Contract payment" for a non-resident contractor, means any payment other than:

a royalty, or
a payment made to the non-resident contractor by or on behalf of a person who is not associated with the contractor, to reimburse costs incurred by the contractor, or
a payment referred to in schedule 4, part E of the Income Tax Act 2007 (Rates of tax for schedular payments).