Income tax Dates
Eligible artists are entitled to receive a payment each time their art is resold (a resale payment). These payments may be taxable.
The resale payment is a set percentage of the resale price. The art professional (for example, an auction house or gallery) resells the artwork and passes the resale payment to a collection agency. The collection agency passes the resale payment to the artist.
If you are an artist who was in business when the artwork was created, you need to pay income tax on resale payments for that art. This is because resale payments are not taxed before they are paid to artists.
My income is not taxed before I get paid
Eligibility for the resale payment
Resale payments are administered by Resale Royalties Aotearoa Toi Huarau. You can check your eligibility for the resale scheme and how to receive a payment on their website. The resale scheme begins on 1 December 2024.
Resale Royalties Aotearoa | Toi Huarau
Income tax for artists
If you were in business when you created your artwork, a resale payment received for that art is taxable income, whether it comes from a resale made in New Zealand or overseas.
If you live:
- in New Zealand and your art is resold overseas, you must pay income tax in New Zealand on the resale payment
- overseas and your art is resold in New Zealand, you must pay income tax in New Zealand on the resale payment.
Overseas sales and double tax agreements
New Zealand has reciprocal resale payment agreements with Australia and the United Kingdom (UK). Artists living in those countries will receive the resale payment when their artwork is resold in New Zealand.
Artists living in New Zealand will receive a resale payment when their artwork is resold in Australia or the UK.
New Zealand has double tax agreements (DTAs) with many countries. DTAs can affect the incomes of New Zealanders who live overseas, or New Zealand residents who receive overseas income.
Important: we recommend that you ask a tax professional for advice.
Non-resident withholding tax
Non-resident withholding tax does not need to be paid on resale payments.
GST for artists
If you are GST-registered, and resale royalties relate to your taxable activity, you only need to account for GST on the royalties in certain circumstances.
The collection agency will tell you if or how GST was charged.
- If GST was 15% – do not include the resale royalty in your GST return.
- If GST was 0% – include the resale royalty in your GST return as ‘zero-rated supplies’.
- If the resale was GST-free (not subject to GST) – include the resale royalty in your GST return as ‘sales and income’.
No invoice is needed
You do not need to provide an invoice to the collection agency or anyone else.
GST on collection agency fees
The collection agency’s fee is 20% of the resale royalty. You can claim GST on the fee if you meet the taxable supply information requirements.
Not GST-registered
If you are not registered for GST, or if the resale royalties do not relate to your taxable activity, these rules do not apply to you.
When an artist has died
When an artist dies, the resale payment goes directly to the beneficiaries under their will, or to their estate. In these situations, the resale payment is not taxable income. The artist’s beneficiaries or estate will not need to pay income tax on the resale payment.
The artist's estate or beneficiaries can decide to transfer the rights to future resale payments to a third party. However, the tax outcomes may be complex. We recommend that you ask a tax professional for advice.