Issue Forty Six, February 2011
TAX RESIDENCE
DID YOU KNOW?
Tax Residence
For the purpose of New Zealand income tax, a person's liability depends on that person's residence status. Whether a person is resident in New Zealand is important for a number of reasons, including:
- Double tax treaties
- Tax rates
- Treatment of foreign losses
- The international regime
- Treatment of dividend imputations and no-resident withholding tax
- The permanent place of abode test:
Does the person have a permanent place of abode in New Zealand, irrespective of whether that person also has a permanent place of abode overseas?
There are special rules for those in the service of the New Zealand Government. The permanent place of abode test takes precedence over the other tests. - The 183-day test:
A person who is present in New Zealand for more than 183 days in aggregate in any 183 day period is deemed to be a New Zealand tax resident from the first day of presence. - The 325-day test:
In order to cease New Zealand tax residence a person must be absent from New Zealand for a period or periods exceeding 325 days in any 12 month period. Non residence commences from the first day of absence.
The New Zealand Government has entered into a number of tax treaties (called Double Tax Agreements) with governments of other countries for the purpose of avoiding double taxation.
HWI Limited can assist you with calculating your tax residency status and whether Double Taxation Agreement may be applicable. If you have investments located overseas, please contact HWI Limited to discuss whether the appropriate tax rates are applied to the income earned, thereby avoiding end of year surprises.
Disclaimer Information contained within this document is of a general nature and does not constitute advice. Readers are cautioned not to act or reply on it without first seeking professional advice. The material and contents provided in this publication are informative in nature only. It is not intended to be advice and you should not act specifically on the basis of this information alone. If expert assistance is required, professional advice should be obtained.
