Non-resident contractors tax (NRCT)
Types and definitions of contracts
Contract activity
"Contract activity or service" has a very broad and expansive meaning as defined in section YA1 of the Income Tax Act 2007. In relation to a non-resident contractor, it means:
- 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.
The Income Tax Act 2007 does not apply to any contract activity by a non-resident contractor performed outside New Zealand. There are few activities that do not meet the definition of resident contractor "contract activity or service".
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”.
Contract project
A "contract project" means any undertaking, project or scheme carried on, carried out, or performed in New Zealand, in connection with most construction and installation-type projects. The Regulations contain an extensive list of the types of activities that fall under the definition of "contract project".
Contract service
A "contract service" is defined as any service of any kind performed by a non-resident contractor. The definition contained in Regulation 2 of the Regulations states that without limiting the meaning of "contract service" the term includes any:
- 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.
The definition of "contract service" is not limited to these specified examples.
Contract payment
"Contract payment" for a non-resident contractor, means any payment other than:
- a royalty
- a cost-reimbursing payment, to the extent that the payment made to the non-resident contractor constitutes reimbursement of expenditure incurred by the non-resident, but excludes any payment made when the non-resident and that other person are associated persons. The cost-reimbursing payment must not include any profit element.
- a payment for the supply of labour or the operation or maintenance of fishing vessels to which Schedule 4 ,Part E of the Income Tax Act 2007 apply.
Other pages in: Non-resident contractors tax (NRCT)
- Double tax agreements - the 183-day rule
- Accounting for tax on schedular payments
- Exemption and special tax rate certificates
- The 92-day rule for employees
- General information for non-resident contractors
- Background and legislation
- Non-resident contractors' tax - examples
- Non-resident contractor's tax obligations as an employer
- Applications and enquiries
Date published: 15 Jan 2009
Back to top
