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This page has information about:

  • when a company is considered to be a New Zealand resident
  • the rules around permanent establishments
  • how to apply for an IRD number for your company
  • dual resident companies and determinations.

When a company is considered to be a New Zealand resident 

A company is resident in New Zealand if it meets any of the criteria in the following table. A detailed discussion of the rules can be found in IS 16/03 Tax residence published in Tax Information Bulletin Vol 28, No 10 (October 2016) from page 36.

Tax Information Bulletin - Vol 28 No 10 - October 2016

Criteria Description

It is incorporated in New Zealand

  • A company incorporated under the Companies Act 1993 is a tax resident in New Zealand.

It has its head office in New Zealand

  • The head office of a company is the office from which the business of the company is directed and carried out.
  • The focus of the test is the physical place of administration and management which is superior to all others.

It has its centre of management in New Zealand

  • This is the place from where the company as a whole is managed on a day-to-day basis.

Control by company directors is exercised in New Zealand

  • Those acting in their capacity as directors control the company here, whether decision-making is confined to New Zealand or not.

Rules around permanent establishments

Double tax agreements (DTAs) with other countries or territories generally provide that a non-resident company with a permanent establishment in New Zealand will be subject to New Zealand tax on income derived here.

The definition of a permanent establishment can vary across different DTAs, but often uses the criteria in the following table.

Criteria Description

A permanent establishment for a business is a fixed place where the business activity is wholly or partly carried on.

This includes:

  • a place of management
  • a branch
  • an office
  • a factory
  • a workshop
  • a mine, an oil or gas well, a quarry or any other place of extraction of natural resources
  • an agricultural, pastoral or forestry property
  • a building or construction site, installation or assembly project that lasts more than six months.

The company may also have a permanent establishment in other circumstances.

This includes:

  • carrying on supervisory activities in connection with a building or construction site, installation or assembly project for more than six months
  • carrying on activities which consist or, or which are connected with, the exploration for or exploitation of natural resources situated in New Zealand
  • using substantial equipment in New Zealand, for more than six months, for or under contract with the enterprise
  • performing any operations for the felling, removal or other exploitation of standing timber.

The company does not have a permanent establishment if it only uses facilities in New Zealand for certain activities.

These are:

  • storage, display or delivery of goods or merchandise
  • maintenance of goods or merchandise that are used for the storage, display or delivery of the company's merchandise
  • maintenance of goods or merchandise that belongs to the company but are used for processing by another entity
  • maintenance of a fixed place of business that is only used for purchasing goods or merchandise or collecting information for the company
  • maintenance of a fixed place of business that is used for any other activity of an introductory or supporting nature, such as advertising or scientific research.

Applying for an IRD number for your company

If your company is deemed to be a resident of New Zealand, you will need to apply for an IRD number by completing an IRD number application - resident non-individual form, IR596.

Dual resident companies and determinations

It is possible for a company to be resident in more than one country. This can lead to a number of undesirable outcomes such as potential double taxation and restrictions on maintaining an imputation credit account. We recommend companies carefully review their governance arrangements so that dual residence does not arise inadvertently.

On the other hand, dual resident companies can be used in tax avoidance arrangements. To address these concerns, Article 4(1) of the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting requires non-individual taxpayers that are dual residents to apply to either competent authority for a determination of their residency for tax treaty purposes.

If there is no agreement, treaty benefits will be denied or only granted to the extent to which competent authorities can agree.

Inland Revenue and the Australian Taxation Office have agreed an administrative approach under which eligible taxpayers can self-determine their residence without the need to apply for a determination. This approach is designed to reduce compliance costs for eligible taxpayers. You can see the eligibility criteria on Tax Policy's site.

Australia and New Zealand's administrative approach to MLI Article 4(1) (Tax Policy)

Companies that are not eligible for the administrative approach will need to apply to a competent authority for a determination. See Tax Policy for details of how to do this if the application is made to the competent authority in New Zealand.

Competent Authority Determinations (Tax Policy)

Last updated: 31 Mar 2023
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