For non-residents & visitors: Non-resident contractors
Who is a non-resident contractor?
A non-resident contractor (NRC) is any person, company or other entity who:
- is not a tax resident in New Zealand, and
- has a contract, agreement or arrangement to perform contract activity which can be for services or supply of equipment under a lease in New Zealand. This does not apply to contracts of service between an employer and employee.
Deducting tax from schedular payments
If you work, lease or rent equipment you will have tax deducted from schedular payments income that is earned in New Zealand. Unless you hold a valid certificate of exemption from non-resident contractors' withholding tax (NRCWT) at the time payment is made, the payer must deduct withholding tax from it. See the table below.
| If you ... | and ... | then the payer deducts ... |
|---|---|---|
|
are an independent non-resident contractor |
have supplied the payer with a completed Tax code declaration (IR330) |
15% from the gross payment. |
|
are an independent non-resident contractor |
haven't supplied an IRD number |
30% from the gross payment. |
|
are an independent non-resident contractor company |
haven't supplied an IRD number |
20% from the gross payment. |
When is tax not deducted from schedular payments?
Tax on schedular payments is not deducted when:
- you are eligible for total relief under a double taxation agreement (DTA), and are present in New Zealand for less than 92 days aggregate in any 12-month period
- any contract payments you receive total less than $15,000 in any 12-month period. In these cases you will be responsible for paying any New Zealand tax owing, if you are not exempt under a DTA.
- you have a current certificate of exemption.
How do I apply for a certificate of exemption?
You will need to meet one of these three criteria to receive a certificate of exemption:
- your resident country has a DTA with New Zealand that allows for a certificate of exemption, or
- you give a bond or other form of security which will secure payment of any income tax payable, or
- in the 24-month period preceding the application you have paid every amount of income tax correctly, complied with your tax obligations, and will continue to comply in the future.
You need to apply in writing by completing a Non-resident contractors withholding tax (NRCWT) certificate of exemption application (IR197) form and sending it to:
Non-resident Contractors Team
Inland Revenue
Private Bag 39984
Wellington Mail Centre
New Zealand
Fax 64 4 890 4510
Email nr.contractors@ird.govt.nz
Do I need to file an income tax return?
Even if tax is deducted from schedular payments you may still need to file a income tax return in New Zealand.
Date published: 01 Oct 2008
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