New Zealand tax residents pay income tax on interest and dividends from overseas investments.
Common examples of overseas investments are:
- savings accounts
- term deposits and bonds
- shares in a foreign company
- foreign investment funds (FIFs).
- foreign retirement savings schemes (overseas pensions)
- rental properties.
Which country do I pay tax to?
You pay tax to New Zealand. You might also pay tax to the other country but you might get a tax credit for this. Check if New Zealand has a double tax agreement (DTA) and what the DTA says.
Different rules for different kinds of investments
Overseas dividends and interest
If you own shares in an overseas company or unit trust, or have overseas bank accounts, you pay tax in New Zealand on the dividends and interest.
Your overseas dividends and interest are included in your taxable income for the tax year. (The tax year is from 1 April to 31 March.)
There are 2 exceptions:
- you are a transitional resident who can get a temporary tax exemption
- your shares are covered by foreign investment fund (FIF) or controlled foreign company (CFC) rules
At the end of the tax year
You need to show the amount you received from overseas dividends in your individual tax return.
Other overseas investments
The tax rules for overseas investments depend on the type of investment and any double tax agreement (DTA) between New Zealand and the other country.