If both countries or territories tax their residents on worldwide income you could be taxed twice on the same income. Double tax agreements (DTAs) have been negotiated between New Zealand and many other countries or territories to decide which country or territory has the first or sole right to tax specific types of income. Find out from this table if your country or territory has a DTA with New Zealand.
|Countries or territories with DTAs with New Zealand|
|Korea (Republic of)||Malaysia||Mexico|
|Netherlands||Norway||Papua New Guinea|
|United Arab Emirates||United Kingdom||United States of America|
If New Zealand has a DTA with your country or territory, that DTA will be available in your country or territory. This may be useful if you want the information in a language other than English.
Many countries or territories that don't have a DTA with New Zealand still allow their citizens to claim a credit for tax paid overseas.
You may be a tax resident in both New Zealand and another country or territory. This means that you are a resident in two countries or territories and subject to the tax laws of each.
For example, if you are a resident in both Australia and New Zealand, the DTA between these two countries states that you will be a resident of the country where a permanent home is available to you. See the table below to find your circumstances.
|If ...||then you will be a resident of the country ...|
|you have a permanent home in both countries||where your personal and economic relations are closer.|
|you do not have a permanent home in either country||where your personal and economic relations are closer.|
|you cannot determine where your personal and economic relations are closer||where you have an habitual abode.|
|you have an habitual abode in both countries||that you are a national of.|
|you don't have an habitual abode in either country||that you are a national of.|
|the person is not an individual||in which the place of effective management is situated.|
|the person is not an individual and the place of effective management is neither or it cannot be determined||competent authorities to determine by mutual agreement.|
This table shows which countries or territories have an agreement with New Zealand that impacts on the taxation of foreign pensions.
|China||Cook Islands||Czech Republic|
|Isle of Man||Italy||Japan|
|Jersey||Korea, Republic of||Malaysia|
|Papua New Guinea||Philippines||Poland|
|Turkey||United Arab Emirates||United Kingdom|
|United States of America||Vietnam|
To find out how your overseas pension is taxed you will need to read the DTA or TIEA for the specific country on our Tax Policy website.
Tax relief from New Zealand tax may be sought by non-resident contractors and employees under DTAs.
If your country or territory has a DTA with New Zealand, you may be exempt from New Zealand income tax.
|If you are ...||then ...|
|an employee of a non-resident employer||
some DTAs may exempt you from income tax in New Zealand if:
|an independent (self-employed) contractor||
most DTAs may exempt you from income tax in New Zealand if you are in New Zealand for less than 183 days and you do not have a fixed base or permanent establishment in New Zealand.
|a company or other entity||Some DTAs will exempt you if you do not have a fixed base or permanent establishment in New Zealand.|
The conditions vary between DTAs for both individuals and companies. Some types of income may not be exempt, for example, royalties. You should check your country's or territory's DTA for more information.
|If your country or territory doesn't have a DTA with New Zealand and you are ...||then ...|
|a tax resident in that country or territory||you will be liable for income tax.|
|receiving payments for contract work undertaken in New Zealand||the payer must deduct schedular tax (see next table).|
|If your country or territory doesn't have a DTA with New Zealand and you are ...||and ...||then the payer must deduct schedular tax of ...|
||have supplied the payer with a completed Tax rate notification for contractors (IR330C)||the rate you have chosen, or 15% if you haven't chosen a rate|
|an independent non-resident contractor||have not supplied the payer with a completed IR330C||45%|
|a non-resident contractor company||have not supplied the payer with a completed IR330C||20%.|
This tax is an interim tax and you must file tax returns in New Zealand to work out your actual amount of tax due.
In some cases, the tax that has been deducted is more than your actual amount of tax due. For example, if you can claim expenses against the contract income. In this case, you can apply for a special tax rate to suit your particular situation.
To relieve double taxation, a New Zealand tax resident taxpayer may be entitled to claim a foreign tax credit against their New Zealand income tax liability for any foreign income tax paid. There are two circumstances where a taxpayer may be entitled to claim a foreign tax credit. If the foreign tax:
For more information, see our Interpretation Statement 16/05 and the associated fact sheet
When considering whether a DTA provides a non-resident contractor with relief from New Zealand tax, the most common issues to consider are:
Many DTAs contain articles dealing with particular areas or industries that may or may not provide a non-resident contractor with relief from New Zealand tax. It is therefore important not to assume that because one DTA provides relief to a resident of one country or territory, the same relief will be provided to a non-resident contractor who is the resident of another country or territory.
A non-resident employee may seek relief from New Zealand tax if a (DTA exists between New Zealand and the country or territory in which the employee is a tax resident). Relief may be available under the "Dependent services" article contained within the DTA. Usually, there are three common requirements, all of which an employee must meet to obtain relief under the treaty. They are:
Some DTAs refer to an "income year", "financial year" or "fiscal year" instead of a 12-month period. These references are to New Zealand's deemed income year of 1 April to the following 31 March.
Also if you’re in New Zealand for only part of a day, it is counted as being a whole day. This means that the days on which you depart or arrive are treated as “days present" in New Zealand.
The Non-resident Contractors Team can help you with information about DTAs. You can either: