New Zealand Tax Residency

To be treated as a New Zealand Tax Resident an individual needs to be in NZ for 183 days in a 12-month period or have a permanent place of abode.

There has been some recent development around the issue of permanent place of abode to establish New Zealand Tax Residency. If you are leaving NZ but still have ties to NZ and a place hypothetically available to stay (even if not immediately available, for example an investment property or holiday home) you could still be classed as a NZ tax resident and therefore need to pay tax on your worldwide income in NZ.

Furthermore tax residency can be backdated, for example a person coming to NZ on a holiday, then coming back a month later with family to settle, could be a NZ tax resident from the first time they stepped of the plane.

While needing to file two tax returns in different countries can be a hassle the good news is that for countries that NZ has a double tax agreement with you will be able to claim overseas tax paid to the level of the NZ tax due here on that income. You can go to IRD’s website and see which countries these are.

If you are leaving or entering NZ for more than a holiday it is important to talk this through with your Chartered Accountant and advise them of your intentions, your business interest and interests in trusts and companies as these can also be affected by your NZ tax residency status. We will help you meet your tax obligations and ensure correct disclosures are filed with the IRD.

If you are leaving NZ permanently and meet the criteria for being a non-resident for tax purposes, you would only be taxed in NZ on your NZ sourced income. To cease being a tax resident an individual needs to no longer have a permanent place of abode and be absent from NZ for more than 325 days in a 12-month period.