Tax residency is different from your immigration status
Your immigration status determines whether you can stay in New Zealand and what you can do here.
Your tax residency status determines what taxes you'll pay in New Zealand. You'll either be a:
- non-resident taxpayer
- New Zealand tax resident.
Working out your tax residency status
You'll need to work out your tax residency status in New Zealand to understand how New Zealand's tax laws apply to you.
Tax residency status for individuals
Non-resident taxpayers
As a non-resident taxpayer, if you're earning income from a New Zealand source, you'll generally pay tax to New Zealand.
Examples of income from a New Zealand source are:
- interest from a New Zealand bank account
- dividends from a New Zealand company
- selling a residential property in New Zealand for a profit within a certain period.
If your country or territory has a double tax agreement with New Zealand, it may affect how your income is taxed.
There are exemptions for certain types of income in New Zealand's tax legislation.
Tax for non-resident taxpayers
New Zealand tax residents
As a New Zealand tax resident, you'll generally pay tax on your worldwide income to New Zealand.
Examples of worldwide income are:
- rental income from a property overseas
- interest from a New Zealand bank account
- dividends or deemed foreign investment income from a portfolio of overseas shares.
In short, you'll generally pay tax to New Zealand on what you earn in New Zealand and overseas.
Income is still taxable even if you do not bring it into New Zealand and even if the other country or territory has deducted tax. If you pay tax on the same income in two countries, you'll usually be eligible for a foreign tax credit.
If your country or territory has a double tax agreement with New Zealand, it may affect how your income is taxed.
If you're a new tax resident or returning to New Zealand after 10 years, you may be eligible for a 4-year temporary tax exemption on most types of foreign income.
Tax for New Zealand tax residents
Leaving New Zealand
If you're a New Zealand tax resident and leave the country, you'll need to work out whether you've become a non-resident taxpayer. If so, your income tax obligations will change.
If you have a student loan or are a member of KiwiSaver, for example, you'll also need to consider how leaving New Zealand will affect you. The rules and timeframes are different for each social programme, so you'll need to check what applies to your situation.
International measures against tax evasion
New Zealand has many agreements with other countries and territories to exchange financial account information to combat tax evasion.
- You may need to tell your financial institution where you're a tax resident.
- Penalties will usually apply when you do not declare income.
Paying tax in New Zealand
Once you know your tax residency status, you'll be able to sort out what taxes you'll pay in New Zealand.
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