Tax Residency Rules for Migrants in New Zealand
Tax rules can be complex and can vary depending on your residency status. If you are a migrant in New Zealand or moving away, it’s essential to understand how your tax residency status impacts your tax obligations.
Defining Tax Residency Status
A New Zealand tax resident is someone who has been in the country for more than 183 days in any 12-month period, or someone who has a permanent place of abode in New Zealand. If you’re leaving New Zealand and your tax residency status changes to a non-resident taxpayer, your tax obligations will change. You become a non-resident taxpayer if you:
| Resident Status | Definition |
|---|---|
| New Zealand Tax Resident | Someone who has been in the country for more than 183 days in any 12-month period, or someone who has a permanent place of abode in New Zealand |
| Non-Resident Taxpayer | If you do not have a permanent place of abode in New Zealand and are away from New Zealand for more than 325 days in any 12-month period |
Double Tax Agreements (DTAs)
Double tax agreements exist between New Zealand and certain countries or territories of residence. These agreements may influence how your income from New Zealand is taxed.
Finalising Your Tax Position
If you’re leaving New Zealand and becoming a non-resident taxpayer, you should update your tax details accordingly. Finalising your tax position includes updating your bank account details and payments of interest or dividends to deduct the correct non-resident withholding tax (NRWT).
Transitional Tax Residency
As a new migrant or returning New Zealander, you might qualify as a transitional tax resident. This status can temporarily exempt you from paying tax on most types of overseas income. However, certain types of overseas income are not exempt. The exemptions start and end on certain criteria. You can opt out of the exemption, but if you do, you cannot re-apply for it.
Seasonal Workers or Fishing Crews from Overseas
Special rules apply if you are in New Zealand on a Recognised Seasonal Employer Limited Visa or a Fishing Crew Work Visa. You will not qualify as a tax resident and will be taxed as a non-resident.
Becoming a Non-resident Taxpayer
If you are a New Zealand tax resident, you’ll become a non-resident taxpayer if you do not have a permanent place of abode in New Zealand and are away from New Zealand for more than 325 days in any 12-month period.
Further Guidance
More detailed guidance on tax residency rules is available. It’s always advised to consult a tax professional if you are unsure about your tax residency status.
Migrants living in New Zealand should be well-informed about tax rules to avoid any potential issues and to ensure they are paying the correct amount of tax in their new country of residence.