Global Mobility Services
                  Taxation of International
                  Assignees – New Zealand

People and

Global Mobility
Country Guide

April 2018

Last Updated: April 2018
This document was not intended or written to be used, and it cannot be used, for the
purpose of avoiding tax penalties that may be imposed on the taxpayer.
New Zealand

         Introduction:   International assignees working in New Zealand       4
         Step 1:         Understanding basic principles                       5
         Step 2:         Understanding the New Zealand tax system             9
         Step 3:         What to do before you arrive in New Zealand         14
         Step 4:         What to do when you arrive in New Zealand           19
         Step 5:         What to do at the end of the year                   20
         Step 6:         What to do when you leave New Zealand               22
         Step 7:         Other matters requiring consideration               24
         Appendix A:     Overview of income tax rates                        26
         Appendix B:     Typical tax computation                             27
         Appendix C:     Double-taxation agreements                          29
         Appendix D:     Social security agreements                          31
         Appendix E:     Elements of remuneration packages                   32
         Appendix F:     New Zealand contacts and offices                    33

        Additional Country Folios can be located at the following website:
        Global Mobility Country Guides

                                  Global Mobility Country Guide (Folio)      3
International assignees
working in New Zealand
Foreign nationals sent to work in New      The folio reflects tax law and practice   As details of tax rates,
Zealand often find themselves              in New Zealand as of April 2018. It       exemptions and allowances
confused by the unexpected                 concentrates on the income tax issues     may vary from year to year, we
complexity of the New Zealand tax          that typically confront foreign           suggest that you refer to our
system. Before they arrive, they may       nationals working in New Zealand.         publication "Tax Facts and
have been advised on an employment                                                   Figures," which is revised
contract, on banking arrangements          This folio is not intended to be a        annually.
and on dealing with government             comprehensive handbook dealing with
authorities. Even so, often they fail to   all the potential problems that an        For further information,
understand the precise reasons for the     individual might face. It is a guide to   please contact Suzie
actions they have been advised to take.    the tax system designed to provide        Chichester (Tel [64] 9 355
                                           readers with a basic understanding of     8386) or Jenny Ruiz (Tel [64]
This guide is intended to help foreign     the system and areas where problems       9 355 8476), in our Auckland
nationals in an effort to avoid any tax    may arise. Accordingly, we must advise    office, and Naomi Burwell (Tel
problems before they arrive in New         our readers, particularly those with      [64] 4 462 7369 or Alice Chiu
Zealand, as well as afterwards.            unusual or complex situations, to seek    (Tel [64] 4 462 7237), from
                                           professional advice before any            our Wellington office.
                                           definitive actions are taken.

4        People and Organisation
Step 1:
Understanding basic principles
The scope of taxation in                    resident, transitional                   –   Interest/dividends
New Zealand                                 resident, or a non-resident.                 subject to the RWT rules
                                                                                         at the correct rates
1.   Government revenues are           Capital gains tax
     raised largely through income                                                   –   Certain income where
     taxes, excise taxes and           3.   There is currently no separate               the total amount derived
     custom duties, and a value-            capital gains tax in New                     is less than NZ$200 that
     added goods and services tax.          Zealand. Gains arising from                  has not been correctly
     No separate social security            certain transactions in                      taxed at source.
     contributions are levied other         personal property, real estate,
     than a small levy to fund              financial arrangements and        6.    At the end of the income year,
     personal accident insurance.           certain foreign investments             Inland Revenue (IR) may
     There are no local taxes other         may, however, be subject to             issue a personal tax summary
     than property taxes (rates)            income tax (please refer to             based on wages and salary
     payable to local authorities as        paragraph 49 for further                information provided by
     a result of the ownership of           comments).                              employers. This summary
     land.                                                                          will show if there is a refund
                                       Tax year of individual                       due or tax to pay.
2.   Income tax is imposed on the      4.   The tax year for an individual
     worldwide income of                                                      7.    A personal tax summary will
                                            runs from 1 April to 31                 be sent automatically to
     individuals who are treated as         March. The 2018 tax year,
     resident in New Zealand for                                                    individuals who qualify for a
                                            for example, ends on                    student loan interest write-
     tax purposes unless relieved           31 March 2018.
     by the ability to access the                                                   off, family assistance, who
     transitional residence                 Filing in lieu of a tax                 have incorrect or special tax
     exemption (see paragraph               return:                                 codes, or have secondary
     23). Income tax is also                                                        employment income.
     imposed on New Zealand-           5.   Individuals who only derive
                                            income from the following         8.    Other individuals may
     sourced income of non-                                                         request a personal tax
     residents, although the                sources are not required to
                                            file a tax return:                      summary. You may wish to
     liability may be reduced by                                                    consider requesting a
     the provisions of a double                                                     personal tax summary if you
                                             –   Employment income
     taxation agreement entered
                                                 subject to the PAYE                only worked part of the tax
     into between New Zealand                                                       year, or want to claim
                                                 rules at the correct rates
     and various other countries.                                                   expenses such as income
     As a result, your New Zealand
                                                                                    protection insurance
     tax position will depend on
     whether you are a tax

                                                                   Global Mobility Country Guide (Folio)          5
9.    If you request a personal tax   12.   Individuals who are required            Provisional tax is due in three
      summary, you need to check            to complete a tax return (this          equal instalments during the
      it and inform IR if there are         will be the case for most               year in which the income is
      any corrections or additions.         international assignees) will           earned, unless the person is
      If you receive the summary            receive a summary of                    GST registered, in which case
      and do not contact IR you are         earnings from IR that shows             specific advice should be
      deemed to have accepted IR's          all the employment details              sought. Interest and penalties
      view of your tax position.            supplied by employers.                  may apply to underpayment
                                            Individuals must file their tax         of a taxpayer's tax liability for
10.   From 1 April 2017 onwards,            returns by 7 July following             the year.
      as employee share scheme              year end, with any balance of
      income will be reported by            tax due before the following 7    14.   Failure to file a return or
      employers to IR (see                  February, although filing               make payments by the due
      paragraph 38 for details) we          dates and payment dates may             date may result in penalties
      are expecting an increase in          be extended to the following            and interest charges.
      tax summaries issued by IR            31 March and 7 April,                   Provisions exist for
      to collect any tax due from           respectively, if extension of           extensions of the filing and
      employees.                            time arrangements are                   tax payment deadlines on
                                            available.                              request if the services of a
11.   Individuals who wish to claim                                                 recognised tax practitioner
      a tax credit for donations      13.   Taxpayers who earn income               are used.
      must complete a separate              other than salary or wage
      donations tax credit form             income may be liable to make
      (IR 526).                             provisional tax payments.

6      People and Organisation
Tax residence status                         day within the 12-month                  basis, for that part of the year
                                             period in which the person is            that they were resident.
15.   A person is a tax resident of          personally present in                    Income attributed to the
      New Zealand if he or she has           New Zealand.                             period of non-residence will
      a permanent place of abode                                                      not normally be taxable in
      in New Zealand (whether or       17.   A person will cease to be a tax          New Zealand unless it was
      not that person also has a             resident in New Zealand if he            derived from New Zealand
      permanent place of abode               or she ceases to have a                  sources.
      outside New Zealand) or has            permanent place of abode in
      been personally present in             New Zealand and is                 The impact of tax treaties
      New Zealand for more than              personally absent from New
      183 days in any 12-month               Zealand for more than 325          20.   New Zealand's double
      period.                                days in any 12-month period.             taxation agreements (listed in
                                             Residence is deemed to cease             Appendix C) contain special
16.   The term "permanent place of           from the first day within the            rules for determining the
      abode" is not defined in New           period in which the person               jurisdiction to tax specified
      Zealand tax statutes. Case law         satisfies the above tests. The           types of income. Some
      and recently updated IR                cessation of one’s permanent             treaties contain "tiebreaker"
      guidance has confirmed that            place of abode is a critical             rules which attempt to
      one must first have a dwelling         issue for those New Zealand              overcome situations where an
      in which one habitually                tax residents who undertake              individual is treated as a
      resides (generally interpreted         assignments in other host                resident of both New Zealand
      widely) to have a place of             countries. Advice is critical as         and the other tax treaty
      abode. However, factual                the concept of a permanent               country. The determination
      circumstances (e.g. the                place of abode is often                  of resident status under these
      duration of their presence,            misunderstood by individuals             tiebreaker rules does not
      the nature and quality of the          and is a common reason for               override the operation of the
      use of the place of abode, the         residence disputes raised                general resident status tests
      durability of the person’s             by IR.                                   referred to earlier, but may
      association with the place of                                                   provide relief in dual-
      abode, overall connection to     18.   For the purposes of the 183-             residence scenarios such that
      the place of abode, etc.) must         day and 325-day count tests,             New Zealand’s taxing rights
      be then reviewed on a case-            where a person is present in             on foreign-sourced income
      by-case basis to determine             New Zealand for part of a                are removed or reduced if the
      whether that place of abode is         day, that person is deemed to            tiebreaker rules determine an
      sufficient to be a permanent           be personally present in New             individual is solely tax
      place of abode in New                  Zealand for the whole of                 resident in another state.
      Zealand. It is contemplated            that day.
      that a person can have more                                                     Under most double taxation
      than one permanent place of      Part-year resident                             agreements, an individual is
      abode. Often, it will not be                                                    considered to be tax resident
                                       19.   Where an individual is tax               in the country in which he or
      critical to establish if a             resident in New Zealand for
      permanent place of abode                                                        she has a permanent home
                                             part of the tax year and was             available. Relevant for
      exists because the 183-day             not resident for another part
      test will be met. Note that                                                     international assignees, IR
                                             of the tax year, they will be            generally holds the view that
      residence under the 183-day
                                             taxed on their worldwide                 a permanent home available
      test commences from the first          income, usually on a received

                                                                     Global Mobility Country Guide (Folio)          7
does not exist if the             Tax exemptions                                 (employer superannuation
      accommodation is temporary                                                       contribution tax) applies to
      in nature such as multiple        23.   The government enacted a                 all employers’ cash
      short stay serviced                     temporary exemption (the                 contributions to employees'
      apartments even though the              “transitional resident”                  superannuation funds
      total length of time in the             exemption) on certain                    including KiwiSaver accounts
      host country may be much                foreign-sourced income for               (and complying
      longer. Where the permanent             first time tax residents or              superannuation funds). The
      home available tiebreaker               returning New Zealanders                 minimum compulsory
      test does not resolve the issue         (who have been non-resident              contribution amount
      of residence, other tiebreaker          continuously for at least 10             required of employers is 3%
      rules may be applied to reach           years) effective 1 April 2006.           although additional voluntary
      a conclusion.                           If eligible, a tax resident will         contributions may be made
                                              automatically receive this               by the employer. Initial
Spouses                                       exemption for a minimum                  KiwiSaver enrolment applies
                                              48-month period. Specific                to employees who are New
21.   Spouses are treated as                  advice on eligibility, the               Zealand citizens or entitled to
      separate taxpayers in New               extent of the exemption and
      Zealand and separate tax                                                         be in New Zealand
                                              planning for the expiry of the           indefinitely.
      returns are filed. However,             exemption period should
      for certain welfare purposes,           be sought.                               International visitors
      the concept of family income                                                     (excluding certain Australian
      is relevant.                      24.   There is a separate 48-month             citizens) and those on
                                              exemption in the context of              temporary work permits
Family assistance                             foreign pension lump sum                 cannot become KiwiSaver
22.   Since April 2005, the                   withdrawals or transfers. The            members so KiwiSaver will
      government has been phasing             exemption is designed to                 not affect most international
                                              provide targeted relief for              assignees to New Zealand.
      in the “Working for Families”
      package to assist low to                returning residents (holding             Migrants to New Zealand
      middle-income families. It              foreign pension entitlements)            from Australia will have the
      aims to increase family                 who do not satisfy the                   option of transferring any
      incomes and make housing                transitional residence criteria          Australian Superannuation
      and childcare more                      (see above).                             Funds to certain New
      affordable for families.          KiwiSaver                                      Zealand KiwiSaver funds
      Working for Families is not                                                      where they have permanently
      available to individuals who      25.   All full and part-time                   emigrated from Australia.
      are within their 48-month               employees aged between 18
      transitional resident                   to 65 are able to participate in   26.   New eligible employees will
      exemption period (see below)            the “KiwiSaver Scheme,” a                automatically be enrolled and
                                                                                       have a six-week period in
      and should such an                      New Zealand superannuation
      individual claim Working for            scheme with certain tax                  which to opt out.
      Families, they will be deemed           benefits on employee
      to have elected out of the              contributions and
      transitional resident                   compulsory employer
      exemption.                              contributions. ESCT

8      People and Organisation
Step 2:
Understanding the New Zealand
tax system
Taxation of New Zealand                      arrangement. Only employers             –   Low-interest loans;
tax residents                                can determine the tax
                                             treatment of employer                   –   Subsidised transport;
Worldwide income                             provided accommodation or               –   Employer contributions
                                             allowances and therefore
27.   An individual who is a New                                                         to foreign employee
      Zealand tax resident is                employers should obtain                     superannuation
      subject to New Zealand tax             specific advice in the                      schemes or other
                                             structuring of inbound and
      on their worldwide income,                                                         insurance benefits.
      whether or not the income is           outbound assignments.
      earned in or remitted to                                                Employee share purchase
                                       30.   Some relocation expenses         schemes
      New Zealand.                           paid by an employer are, in
Employment income                            some cases, non-taxable to       33.   A benefit received under a
                                             the employee. The                      “share purchase agreement”
28.   Amounts derived in                     government has legislated the          in connection with an
      connection with an                     scope of what relocation costs         individual’s employment or
      individual’s employment or             are non-taxable.                       service is income of that
      services are taxable in the                                                   individual. A share purchase
                                       31.   Employers are required to
      hands of the employee. This                                                   agreement is defined as an
      includes salaries, wages,              withhold and remit income              agreement to sell or issue
      bonuses, allowances and                taxes (PAYE) to IR when                shares in a company to an
                                             paying an individual's
      expenditure incurred on                                                       employee that is entered into
                                             employment income.                     in connection with the
      account of an employee.
                                       32.   Certain non-cash forms of              employee’s employment or
29.   Accommodation benefits an                                                     service, whether or not an
                                             remuneration received by
      individual receives in                                                        employment relationship
      connection with his/her                employees are not subject to
                                             income tax in the employee's           exists when the employee
      employment or service are                                                     receives a benefit under the
                                             hands, but are subject to
      taxable unless an exemption                                                   agreement. A benefit includes
      applies. There are                     fringe benefit tax (FBT),
                                             which is payable by the                free or discounted shares
      exemptions for employer                                                       received through an
                                             employer. This tax applies
      provided accommodation in                                                     employee share purchase or
      specific assignment related            primarily to:
                                                                                    option scheme.
      scenarios, provided they are           –    Private use of employer
      not part of a salary sacrifice              provided cars;

                                                                   Global Mobility Country Guide (Folio)         9
34.   Individuals who have been         38.   From 1 April 2017 onwards,              Zealand. The gross amount of
      awarded options to purchase             employers have compulsory               interest is taxable to the
      or acquire shares at a                  reporting requirements in               individual while a credit is
      discount in an employee                 New Zealand in respect of               given for any tax withheld on
      share purchase scheme will              most ESS income. From this              the interest payment.
      be taxed on any gains on the            date, employers also have the           Resident withholding tax
      date the taxpayer exercises             ability to voluntarily withhold         (RWT) is automatically
      the options or acquires the             tax on ESS income. Both the             deducted from New Zealand-
      shares.                                 mandatory reporting and                 sourced interest payments at
                                              voluntary withholding will be           the rate of 33% if the person
35.   New legislation was enacted             via the PAYE (payroll)                  does not notify the interest
      on 29 March 2018                        system. Where employer                  payer of their correct tax rate.
      introducing new rules to align          reporting is completed,
      the taxing point of employee            employees will no longer          40.   The gross amount of foreign-
      share scheme (ESS) income               need to separately disclose             source interest income is
      to when economic ownership              this income on their                    taxable in New Zealand. A tax
      of the shares is received by            individual income tax                   credit is granted for foreign
      the employee. . Employers               returns. Where PAYE                     tax withheld at source. Credit
      are encouraged to take advice           withholding is applied, no              provided for foreign tax paid
      on the tax implications of              further tax should be payable           is capped at the New Zealand
      employee share schemes.                 by employees. Where no                  tax payable.

36.   In practice, based on current           withholding is applied,           41.   The transitional resident
      rules, individuals are taxed in         employees will need to                  exemption, if applicable, will
      New Zealand on discounts                continue to pay the tax due to          exempt foreign interest
      obtained from an employee               IR via their income tax return          income during the 48-month
      share purchase scheme if                or on receipt of the personal           exemption period.
      they are either New Zealand             tax summary. Employers
      tax resident at the time the            should obtain advice on their     42.   If an individual has a foreign
                                              requirements particularly in            mortgage there may be a
      options are exercised or, if
      non-resident, the benefit has           relation to internationally             requirement to register the
      a New Zealand source.                   mobile assignees where the              mortgage and deduct non-
                                              amount to be reported may               resident withholding tax
      Apportionment may be
      required, however, where the            vary due to foreign service.            (NRWT) from the interest
      employee's tax residence                Employers will also need to             payments. Certain
                                              decide if voluntary                     exemptions are available if
      status changes between the
                                              withholding will be applied             the bank has a branch in New
      dates of grant and exercise.
                                              and how this would be                   Zealand. Further advice is
37.   The transitional resident               funded.                                 recommended.
      exemption, if applicable, will
      exempt the portion of foreign
                                        Interest                                Dividends
      income if exercise of options     39.   Interest income is treated as     43.   Dividends received by
      or acquisition of shares                ordinary income whether or              shareholders are treated
      occurs during the 48-month              not the interest is derived             differently depending on the
      exemption period.                       from a source in New                    source of the dividend. New

10     People and Organisation
Zealand-sourced dividend                determining the net rental              during the 48-month
        income may have imputation              income subject to tax.                  exemption period.
        credits attached. The                   Deductions allowed from
        imputation credits represent            gross rental income include       Capital gains
        company tax already paid on             repairs and maintenance,
                                                                                  49.   Certain capital gains derived
        the underlying profit. In               agent's fees, insurance,                from real property
        addition, a withholding tax of          mortgage interest and a                 transactions may be taxable
        33% is required to be                   depreciation allowance
                                                                                        to the individual. Liability is
        deducted from the gross                 (limited only to chattels).             based on factors such as
        amount of the dividend but is           Foreign exchange gains or               length of ownership, whether
        reduced to the extent that              losses on mortgages
                                                                                        the property has been re-
        imputation credits are                  denominated in foreign                  zoned, and the business
        attached. Credit against                currency, whether realised or           activities of the individual or
        income tax payable is given             unrealised, may also be
                                                                                        persons associated with the
        for the withholding tax and             subject to tax. Total allowable
        imputation credits.                     rental expenses are currently
                                                not restricted to the amount      50.   With effect from 1 October
44.     Foreign dividend income is              of rental income received.              2015 a new ”bright line” test
        taxable in full unless the              Rental losses may be offset             was introduced that will
        individual is subject to the            against an individual's other           require income tax to be paid
        Foreign Investment Fund                 income and carried forward if           on any gains from residential
        (FIF) rules (please refer to            unused. An issues paper was             property that is disposed of
        paragraph 110 for further               released in March 2018                  within 2 years of acquisition.
        details). The gross amount of           proposing to ring fence rental          This has been extended to
        the dividend received must be           losses.                                 within 5 years of acquisition
        converted into New Zealand                                                      for residential properties
        currency before inclusion in      47.   Rental properties that are              purchased from 29 March
        income. A foreign tax credit is         used for both private and               2018. Tax on gains will be
        available for taxes withheld at         income earning purposes are             payable at an individual's
        source on dividends. The                subject to the mixed use                marginal income tax rate.
        credit for foreign tax paid             assets rules. This legislation          These rules are broad enough
        cannot exceed New Zealand               limits taxpayers’ ability to            to capture gains on the
        tax payable on the income.              claim tax deductions for costs
                                                                                        disposal of foreign property
                                                associated with the                     of New Zealand residents if
45.     The transitional resident               properties. It is important
        exemption, if applicable, will                                                  they meet the criteria.
                                                that individuals with mixed
        exempt foreign dividend                 use assets keep records of the          Exemptions apply to the
        income during the 48-month              days the asset is deriving              taxpayer's main (family)
        exemption period.                       income and days where the               home, or where the property
Rents                                           asset is used for private               is part of a decease estate or
                                                purposes.                               inheritance or where the
46.     Rental income is treated as                                                     property is transferred as
                                          48.   The transitional resident
        ordinary income. Certain                                                        part of a relationship
        expenses incurred are                   exemption, if applicable, will          settlement. As part of these
        allowed as a deduction in               exempt foreign rental income            new requirements, non-

                                                                       International Assignment Taxation Folio       11
resident / offshore                    employment income such as              exclusively in New Zealand,
      individuals will need to apply         professional fees for                  business income must be
      for a New Zealand Inland               preparing tax returns and              apportioned.
      Revenue number (see                    certain premiums for loss of
      paragraph 78) in order to              earnings insurance.              55.   Interest deductions on New
      acquire certain New Zealand            Additionally, there are a              Zealand business operations
      real estate. Additionally,             small number of exemptions             /rental properties could be
      withholding tax can apply to           and rebates that may be                restricted – a thin
      transactions involving non-            available to reduce the tax on         capitalisation regime exists
      residents. Specific advice is          gross income. As noted                 and this also applies to
      recommended.                           earlier, deductions can be             individual taxpayers.
                                             made insofar as they relate to   Withholding tax
Self-employment                              the earning of rental income
                                             and income from self-            56.   Non-residents deriving
51.   Self-employed individuals
      may deduct expenditure                 employment. Interest on                interest, dividend or royalty
      incurred in deriving taxable           money borrowed to acquire              income from New Zealand
                                             investments is also deductible         will be subject to a
      income from their businesses.
      The individual may also be             provided the interest is               withholding tax. The rates of
      required to register for goods         incurred in deriving gross             the withholding tax (0%-
      and services tax and may               income for the individual.             30%) will often be reduced
      have certain legal                                                            under New Zealand's double-
                                       Foreign superannuation                       taxation agreements with
      responsibilities as an
      employer. It is recommended      53.   The taxation of foreign                other countries. Generally,
      that professional advice be            superannuation (accruing               the withholding tax deducted
      sought before commencing               entitlements, pension and              will be the final tax liability of
      any such undertaking.                  annuity amounts as lump                the individual in respect of
      Certain self-employment                sum amounts) is complex and            that income. Resident
      income is subject to                   advice is strongly                     individuals making interest
      withholding tax deductions             recommended.                           payments to offshore banks
      by the payer depending on                                                     may be subject to these
      the nature of the services and   Taxation of non-residents                    withholding tax obligations
      / or where the services are                                                   unless exemptions apply.
                                       New Zealand income
      provided. New Zealand now                                               Computation of tax
      allows certain contractors to    54.   Non-residents of New
      voluntarily choose a rate of           Zealand will generally be        Tax rates
      withholding tax if certain             taxed on employment income
      criteria are met.                      earned in New Zealand in the     57.   Personal tax rates, at the date
                                             same manner as a resident of           of this publication, are set out
Deductions from income                       New Zealand. In addition,              in Appendix A. Income tax
                                             non-residents may be taxed             rates are the same for
52.   Income tax is assessed on                                                     residents and non-residents
      virtually all gross                    on all income from the
                                             operation of a business                (except where non-residents
      employment income. There                                                      suffer a final non-resident
      are limited allowable                  carried out in New Zealand. If
                                             operations are not carried on          withholding tax on interest,
      deductions against                                                            dividend or royalty amounts).

12     People and Organisation
A typical tax computation is            individual may be entitled to
      set out in Appendix B.                  receive a tax refund. Excess
                                              imputation tax credits are
Tax Credits                                   carried forward to
                                              subsequent income years
58.   Tax credit schemes exist to
      give effect to social policy.           until they are used.
      The availability of tax credits   Provisional tax payments
      is generally limited to tax
      residents. The following tax      61.   Where the tax credits and tax
      credits may be available to             deductions are insufficient, a
      taxpayers:                              final payment of income tax
                                              is required. If this residual
       –   Making charitable or               income tax liability is
           other public benefit gifts         NZ$2,500 or more the
           of more than NZ$5; tax             individual may be required to
           credits arising through            pay provisional tax in
           gifts cannot exceed the            instalments for the following
           income tax otherwise               tax year. Where this residual
           payable; and                       income tax liability is more
       –   Independent Earner Tax             than NZ$60,000 backdated
                                              interest may be payable on
           Credit (IETC).
                                              the amount of underpaid tax
59.   Once an individual's final tax          (this threshold was
      liability is determined, the            previously NZ$50,000 for
      applicable tax credits and              income tax years
      source deductions are applied           commencing prior to 1 April
      to calculate the final amount           2017).
      due. These arise from:

       –   Employer deductions
           from wages and salaries;

       –   Withholding tax
           deductions from receipts
           of interest and

       –   Imputation tax credits
           attached to dividends
           received; and

       –   Foreign tax credits.

60.   Where total tax credits and
      tax deductions exceed the
      individual's tax liability, the

                                                                    International Assignment Taxation Folio   13
Step 3:
What to do before you arrive
in New Zealand
Planning is the key                    Timing of income receipt               Trusts

62.   Depending on the particular      64.   As mentioned previously,         65.   New Zealand operates a
      circumstances of the                   individuals resident in New            complex regime for the
      individual, the taxation               Zealand are normally taxed             taxation of trusts involving
      system of the country the              on employment income upon              non-resident settlors or
      individual is leaving and the          receipt. As a result, income           beneficiaries. The regime
      existence of a double taxation         which is earned prior to               looks to the residence of the
      agreement with New Zealand,            becoming a New Zealand tax             settlor and, in some
      a wide range of taxation               resident will not generally be         instances, can impose tax at
      matters will have to be                taxable in New Zealand                 the rate of 45% on
      considered before the                  (unless the income is sourced          distributions from the trust.
      individual moves to New                in New Zealand). Depending             Where certain disclosure
      Zealand. Specific advice on            on the taxation of such                requirements are met and
      their eligibility for the              income in the foreign country          elections made, it is possible
      transitional residence                 of residence and the tax rates         to bring an offshore trust
      exemption, the extent of the           of that jurisdiction, an               within the regime applying to
      exemption and planning for             individual may wish to                 domestic trusts. Disclosure
      the expiry of the exemption            arrange to receive such                requirements apply in a wide
      period should be sought.               income prior to entering New           range of circumstances to
                                             Zealand. Note, however, that           both trustees and settlors.
63.   The following paragraphs               any international assignment           The trust regime is complex
      outline a few of the issues            bonuses and allowances that            and potentially costly.
      that should be considered              are deemed to be earned in             Specific professional advice
      before the move.                       New Zealand will be subject            should be sought even where
                                             to New Zealand tax, even if            the transitional residence
                                             they are paid pre-arrival or           exemption exists.

                                                                   Global Mobility Country Guide (Folio)       14
Foreign trust disclosure                    how such investments                    the spouse with the
                                            will be treated for New                 higher income.
66.   Disclosure requirements               Zealand tax purposes. If
      apply in respect of foreign           such investments prove              –   Certain foreign life
      trusts. Legislation has               not to be tax-effective                 insurance policies may
      recently been enacted                 for New Zealand tax                     be subject to New
      increasing the disclosure             purposes, consider                      Zealand tax on an
      requirements and including,           disposing of them before                unrealised basis.
      amongst other changes, the            coming to New Zealand
      creating of a register of                                                 –   The taxation of foreign
                                            or, if the transitional                 superannuation and
      foreign trusts, more detailed         resident exemption is
      information to be provided                                                    retirement schemes is
                                            available, before that
      on trustees and beneficiaries                                                 complex; therefore,
                                            exemption period of 48                  professional advice
      and annual return filing              months expires. In other
      obligations. Specific advice is                                               should be sought to
                                            instances, it may be
      recommended on these                                                          determine any taxation
                                            advantageous to hold                    obligations in both these
      requirements.                         investments until after                 areas.
Some useful points                          arriving in New Zealand
                                            (e.g., if a capital gains    Structuring the
67.   Consideration might be given          tax exposure at home         remuneration package
      to the following tax                  may be eliminated
      planning points:                      where a share portfolio      68.   Some employers may offer
                                            is disposed of after               their employees a complete
       –   The income from certain          becoming a non-                    remuneration package for
           foreign equity                   resident of the home               working in New Zealand. In
           investments may be               country).                          addition to regular salary,
           subject to the FIF rules                                            commissions, bonuses, etc.,
           (please refer to             –   Consideration might be             the employer may
           paragraphs 108 to 111            given to disposing of              compensate the employee by
           for further details). In         investments that have              providing an allowance and
           some instances, it may           accrued losses before              payment for any additional
           be desirable to realise          New Zealand residence              costs which arise from living
           the investments before           commences, in order to             away from his/her home
           entering New Zealand             prevent the erosion of             country. Certain eligible
           or, if the transitional          their tax cost resulting           relocation costs and
           resident exemption is            from the application of            accommodation benefits /
           available, before that           rules deeming                      allowances can be treated as
           exemption period                 acquisition.                       non-taxable. Employers
           expires in order to defer                                           should obtain advice when
           the application of these     –   Investment portfolios              drafting the employment or
                                            should be organised
           rules.                                                              assignment offer to maximize
                                            between spouses so that            the benefit of exemptions
       –   Re-evaluating                    individual recipients can          where applicable.
           investments, especially          be clearly established, in
           those which provide tax          order to ensure limited      69.   A decision must be made as
           shelter in the home              attribution of income to           to whether the remuneration
           country, to determine                                               is to be paid in New Zealand

                                                              Global Mobility Country Guide (Folio)       15
dollars or in the currency of           variations in such plans.         Work Visas
      the home country. This will             Consideration should be
      be an important issue if there          given to inclusion of such a      73.   Before an individual is
      may be significant                      plan as one of the conditions           allowed to work in New
      fluctuations in exchange                of the assignment.                      Zealand he or she must have
      rates. This decision will not                                                   a valid work visa, unless the
      affect the tax payable in New     Customs                                       person is a citizen of
      Zealand, as a resident                                                          Australia or New Zealand, a
                                        72.   On entering New Zealand to              holder of a New Zealand
      individual will be taxed on
                                              take up permanent residence,            Resident Visa, or a holder of
      worldwide income and non-               an individual may import
      residents are taxed on New                                                      an Australian Permanent
                                              personal and household                  Resident Visa. In cases where
      Zealand-sourced income
                                              effects (but not items of a             a work visa is required, an
      regardless of the currency in           commercial or business
      which it is paid.                                                               application should be
                                              nature) free of duty and                submitted (in conjunction
70.   An employment contract                  taxes. Note that such                   with the proposed employer)
      should be reviewed by a New             personal and household                  to Immigration New Zealand
      Zealand tax adviser prior to            effects must have been owned            in sufficient time prior to
      finalisation. This is important         and used by the individual              departure for New Zealand.
      for the purposes of                     prior to departure for New              Work visas are typically
      identifying possible residency          Zealand. Stringent                      issued in line with the
      issues, exemption                       agriculture quarantine                  duration of their New
      opportunities and putting in            requirements and import                 Zealand employment, up to a
      place tax-effective                     restrictions apply to plant             period not exceeding five
      remuneration packages from              and animal products.                    years. PwC New Zealand has
      both home and host country              Personal effects do not                 fully licensed immigration
      perspective. Aside from                 include motor vehicles, but             advisors that can assist you in
      exemption opportunities,                there is a concession enabling          your immigration needs.
      cash benefits may be more               first-time immigrants to
                                              import a motor vehicle free of          Foreigners who breach any of
      tax-effective than non-cash
                                              duty and taxes where that               their visa conditions (for
      benefits, if foreign tax credit                                                 example working
      issues are relevant. In other           motor vehicle has been
                                                                                      without a valid work visa, or
      cases, non-cash benefits may            owned and used for at least             working for a different
      be more tax efficient.                  12 months prior to its import.          employer or location
                                              However, it should be noted             than what is allowed on their
Tax reimbursement plan                        that if motor vehicles are sold         work visa) are liable for
                                              or otherwise disposed of                deportation.
71.   It is not uncommon for                  within 24 months after
      employers to provide a tax                                                      There are significant
                                              importation, they may be                penalties for employers for
      equalisation program in                 subject to duty calculated on           non-compliance and
      conjunction with an overseas            a sliding scale basis, with the         implications for the approval
      assignment. This usually                value on the day of                     of future application.
      consists of a plan to ensure            importation being
      that the employee's total tax           apportioned to the period
                                                                                Employment contracts
      liability is not increased by           remaining of the 24 months.
      accepting the overseas                                                    74.   New Zealand has a
      assignment. There are many                                                      deregulated labour market
                                                                                      where labour union

16     Human Resources Services
membership is not                       –    Children's educational
      compulsory. Employees and                    matters;
      employers, or their appointed
      agents, negotiate                       –    Care and transport of
      employment contracts, which                  domestic pets and
      can be written or unwritten,                 New Zealand quarantine
      individual or collective. A                  rules;
      minimum code of conditions              –    Consultation with your
      is established to cover holiday
                                                   legal adviser,
      entitlement, sick and parental               particularly with respect
      leave rights as well as                      to the validity of your
      minimum health and safety
                                                   current will on
      standards. An individual                     relocation to New
      should review his/her                        Zealand. In addition, if
      employment contract to
                                                   you have no will,
      ensure it reflects the terms                 consider whether New
      and conditions of the                        Zealand intestacy rules
      secondment. This may be
                                                   may apply should you
      important to ensure                          die while resident in
      continued participation in the               New Zealand.
      employer's benefit plans.
                                        Pre-arrival consultation
Other matters
                                        76.   If possible, a pre-arrival
75.   There are numerous other                consultation should be
      matters that while not
                                              held with a PwC expatriate
      compulsory, should be                   tax specialist and
      attended to prior to moving             immigration advisor well in
      to New Zealand, including:              advance of the transfer to
       –   Insurance coverage                 New Zealand. This enables
           (both personal and                 potential tax problems and
           assets);                           planning opportunities to be
                                              identified and acted upon. It
       –   Granting of power of               also facilitates contact
           attorney where                     between New Zealand and
           appropriate;                       home country tax advisers,
                                              and with the assignee.
       –   Shipment of personal
           and household goods;

       –   Notification to banking
           and financial
           institutions and
           arrangement for
           continuation of

                                                                    International Assignment Taxation Folio   17
Global Mobility Country Guide (Folio)   18
Step 4:
What to do when you arrive
in New Zealand
Tax file number                              non-resident individuals in      continues to monitor and
(IRD number)                                 opening a New Zealand bank       comply with any obligations
                                             account in order to obtain an    arising under their home
77.   Individuals should apply to            IRD number. Individual           country tax law. Assistance in
      IR for a tax file number upon          assignees may require            meeting these obligations can
      arrival in New Zealand                 guidance on the appropriate      be provided by a PwC
      (known as an IRD number).              application form and process     expatriate tax specialist
                                             to be completed to obtain an     through access to our
78.   IR has changed the process
      for applying for an IRD                IRD number.                      international network
      number. There are now two                                               of offices.
                                       Social welfare
      different IRD number
      application forms with           79.   New Zealand does not have a
      separate forms for resident            separate social security tax.
      individuals and non-resident           No separate social security
      / offshore individuals.                contributions are levied,
      Resident individuals should            other than a small levy to
      complete Form IR595. Non-              fund personal accident
      resident / offshore                    insurance. Individuals and
      individuals should complete            their families may be
      Form IR742. Previously IRD             immediately entitled to
      numbers needed to be                   certain social welfare
      applied for in person,                 benefits. Note, however, that
      however, there is now the              some benefits are income
      ability to apply online for an         tested and most are subject to
      IRD number where certain               tax. New Zealand has
      conditions are satisfied. Non-         reciprocal social security
      resident individuals (other            agreements with certain
      than Australian passport               countries - please refer to
      holders) will require a fully          Appendix D.
      functioning New Zealand
      bank account in order to         Complying with home
      obtain a New Zealand IRD         country tax law
      number. Practical difficulties   80.   Whilst in New Zealand, it is
      have been encountered by               important that an individual

19     People and Organisation
Step 5:
What to do at the end of the year
Tax return                                    (31 March). Generally, the               summary as being correct,
                                              completed tax forms must be              they are deemed to have
81.   The annual income tax                   filed with IR by the 7 July              signed it as if it was a return
      liability and available tax             following year end.                      of income. If an individual
      credits are determined by               Extensions of the time within            disagrees with their income
      way of personal tax                     which a tax return must be               statement but fails to notify
      summaries issued by IR and              filed may be obtained on                 IR, they are deemed to have
      tax credit claim forms filed by         application or where the                 taken the same tax position
      the individual.                         services of a recognised tax             as that adopted by IR.
82.   Some individuals (including             practitioner are used.
                                                                                 88.   IR has advised that the
      most international assignees)     84.   Most individuals who receive             confirmation of a personal
      are required to furnish                 salary, wages, interest or               tax summary can be done via
      returns. These include most             dividends from a New                     IR's online services or toll-
      non-residents who receive               Zealand source with the tax              free telephone service.
      New Zealand sourced                     deducted at source will have
      income, provisional                     their final income tax liability   89.   An individual must notify IR
      taxpayers, recipients of                determined by a personal tax             of any error in his/her
      withholding payments,                   summary issued by IR.                    personal tax summary,
      taxpayers who have made a                                                        together with the necessary
      net loss or have a net loss to    General Assessment                             corrections, unless the
      carry forward, taxpayers with                                                    amount of gross income from
      interest or dividends that        85.   A personal tax summary                   employment, interest or
      total more than NZ$200 and              which is deemed to be a                  dividends not included in the
      have not had sufficient                 return of income will also be            personal tax summary is less
      withholding tax deducted at             deemed to be a general                   than NZ$200.
      source, and individuals who             assessment of an individual's
      arrive in or leave New                  taxable income and the             90.   If a personal tax summary
      Zealand during that year.               income tax payable/                      shows that the taxpayer is
                                              refundable.                              due a refund of less than
83.   Individuals who are required                                                     NZ$200, it will be paid
      to file a tax return must         86.   If the personal tax summary              automatically within 30 days
      complete Form IR3 or, in the            is deemed to be a general                of the personal tax summary
      case of certain non-residents,          assessment, then IR will not             being issued. A refund that
      Form IR3N. These forms can              send the individual a separate           exceeds NZ$200 will not be
      be obtained from IR if they             notice of assessment.                    refunded by IR until the
      are not posted out at the end                                                    taxpayer has confirmed the
                                        87.   If an individual accepts
      of the tax year                         his/her personal tax

                                                                      Global Mobility Country Guide (Folio)         20
personal tax summary is

Payment of tax due

91.   Where an assessment shows
      a balance of tax payable, the
      outstanding amount is
      payable by 7 February of the
      following year. However,
      where the taxpayer has a
      recognised tax agent, the due
      date for payment will be 7
      April of the following year.
      Where payment is not made
      by the due date, late payment
      penalties will be imposed and
      interest can arise in certain
      circumstances. These
      penalties and interest will
      compound where tax remains

                                      Global Mobility Country Guide (Folio)   21
Step 6:
What to do when you leave New Zealand
Tax return                                     sometimes request a                      residence with a minimum of
                                               residence assessment form                formality. There are limited
92.   An individual who ceases to              when assessing the final                 restrictions applying to the
      be resident in New Zealand is            resident New Zealand                     export of goods. Controls
      still subject to New Zealand             tax return.                              limit trade in endangered
      tax on worldwide gross                                                            species of flora and fauna.
      income from 1 April to the         96.   For share/option income yet
      date of departure. After the             to be realised, there are no      99.    Purchases of items prior to
      date of departure to the                 departure tax rules.                     departure can be free of
      following 31 March, the                  Therefore share benefits                 goods and services tax,
      individual is only subject to            income that relates to                   provided that they are
      New Zealand tax on New                   services performed wholly or             exported by the vendor and
      Zealand-sourced income,                  partly in New Zealand during             do not come into the
      assuming the individual                  the vesting period may be                purchaser's possession while
      becomes a non-resident on                taxable in New Zealand at a              still in New Zealand.
      departure.                               later time (in the year of full
                                               vesting/exercise) even though     Becoming non-resident
93.   To file a part-year return               the share taxable income is
      (Form IR3), you will need to                                               100. An individual will remain a
                                               realised after ceasing New             resident of New Zealand for
      obtain details of your total             Zealand tax residence – a
      earnings and tax deductions                                                     tax purposes until such time
                                               subsequent non-resident                as they cease to have a
      to date from your employer               return declaring this income
      or from IR.                                                                     permanent place of abode in
                                               may be required (where there
                                                                                      New Zealand and have spent
94.   If you are leaving part way              is no employer reporting on            325 days in any 12-month
      through an income year, it is            this equity income).                   period away from New
      likely that you will be entitled   97.   An individual with a New               Zealand. In such a case, they
      to a tax refund; therefore, it           Zealand student loan who is            will be deemed to be non-
      is to your advantage to file             going overseas for 6 months            resident from the first day
      a return.                                or more should confirm their           they were absent in that 12-
                                               notification and repayment             month period. Often this will
95.   Individuals are not                                                             coincide with the departure
      specifically required to notify          obligations with IR.
                                                                                      date, but return visits to
      IR that they are leaving New       Transferring possessions                     New Zealand after departure
      Zealand. The IR is notified of                                                  might affect the position.
      their departure via a              98.   Most of an individual's
      disclosure item in the tax               belongings may be returned        101.   An individual retaining a
      return, although IR                      to his or her usual place of             permanent place of abode in

                                                                      Global Mobility Country Guide (Folio)       22
New Zealand after his/her               permanent in nature. A cash             appropriate actions taken.
      departure will still have a             withdrawal cannot be done               This could include filing the
      liability to New Zealand                earlier than 12 months after            final tax return, pursuing
      income tax on their                     departure from New Zealand;             appropriate tax planning
      worldwide income, subject to            however, transfers to a                 opportunities and taking
      the provisions of any                   suitable foreign scheme are             advantage of any
      applicable double taxation              possible within the 12-month            concessional tax rates
      agreement.                              period. The cash withdrawal             applicable. Cessation of tax
                                              option is not available to              residence could have an
102. A non-resident individual will           those permanently moving to             impact on New Zealand
     only be liable to tax on                 Australia. Tax implications of          settled trusts, New Zealand
     income sourced in New                    the foreign tax jurisdiction on         held companies or
     Zealand. Some relief may be              the transfer should be                  partnerships and the taxation
     available where a double                 considered prior to any                 of non NZD bank accounts
     taxation agreement applies.              withdrawal from the                     and foreign debt instruments.
KiwiSaver                                     superannuation fund.                    The tax treatment of
                                                                                      negatively geared
103. An individual that has joined
                                        Exit consultation                             investments (thin
     KiwiSaver may wish to              104. A final consultation with an             capitalisation) may also
     consider a withdrawal of                                                         change. Advice is always
                                             expatriate tax specialist prior
     his/her KiwiSaver                       to departing New Zealand                 recommended.
     superannuation funds after              will enable all the relevant
     his/her departure,                      New Zealand tax issues to be
     particularly if the departure is        identified and the

                                                                     Global Mobility Country Guide (Folio)      23
Step 7:
Other matters requiring consideration
Gift duty                                     up to maximum earnings of                 There are 3 different
                                              $126,286from 1 April 2018.                regimes as explained
105. Gift duty has been repealed                                                        below:
     from 1 October 2011. Gifts          Estate duty
     made on or after 1 October                                                  109. CFCs: The CFC regime
     2011 are not liable for gift        107. Estate duty has been                    applies to non-resident
     duty and gift statements (and            abolished in New Zealand.               companies which are
     accompanying documents)             International taxation                       controlled by New Zealand
     do not need to be filed for                                                      residents. The government
     these gifts any longer. Even        108. Complex tax regimes apply               has previously enacted
     though gift duty has been                where persons hold interests            changes to the CFC regime -
     repealed, the income tax and             in controlled foreign                   changing to an active/passive
     legal implications of gifts still        companies (CFCs) and                    income test rather than a
     need to be considered.                   foreign investment funds                country by country based
                                              (FIFs).                                 exemption. Income
Accident compensation                                                                 attribution only applies to
                                              New Zealand’s approach to               passive income and there is
106. Anyone who suffers personal              worldwide taxation may
     injury by accident while in                                                      usually a 5% threshold before
                                              require resident shareholders           that passive income is
     New Zealand is covered by                of foreign entities to attribute
     the Accident Rehabilitation                                                      taxable.
                                              income from a CFC or FIF.
     and Compensation Insurance               Such rules may also extend to      110.   Portfolio FIFs: The FIF
     Scheme (ACC). The scheme                 certain foreign                           regime applies where an
     provides benefits, on a no-              superannuation schemes                    offshore investment is held
     fault basis, to meet medical             prior to 31 March 2014 and to             by a New Zealand resident
     costs and to provide                     certain life insurance policies.          taxpayer who holds less than
     earnings-related                         As the CFC and FIF regimes                10% of the shares in a foreign
     compensation where                                                                 company or less than 10% of
                                              are complex, professional
     appropriate. The scheme is               advice should be sought to                the units in a foreign unit
     funded by special levies                 determine any taxation                    trust, certain foreign
     imposed on motor vehicle                                                           superannuation interests or
     registration, petrol, and                                                          certain foreign life insurance
     business income from self-                                                         policies. For such
     employment, payroll and                                                            investments, individuals will
     employees' earnings. The                                                           need to calculate income on a
     employee levy is charged at a                                                      deemed basis under several
     flat rate of 1.39% of earnings                                                     available income calculation

                                                                      Global Mobility Country Guide (Folio)        24
methods unless specific          Foreign exchange                               –   The level of
       exemptions apply.                                                                   remuneration required
                                        115.   New Zealand has no foreign                  to provide a proper
111.   Non portfolio FIFs: this                exchange controls.                          standard of living for an
       regime applies where an                 Individuals may move funds                  individual and his or her
       offshore investment of 10% or           into and out of the country                 family;
       greater is held by a New                without restriction. However,
       Zealand resident but it is not          gains or losses arising from            –   Motor vehicle
       necessarily a CFC: Investors            the effect of exchange                      regulations;
       may have a choice to apply              variations on money lent or
       the CFC rules or to apply the           borrowed in a foreign                   –   Life insurance and other
       Portfolio FIF rules.                    currency may be required to                 insurance coverage
                                               be included when calculating                while working in New
112.   The transitional resident               the taxable income of a                     Zealand.
       exemption, if available, will           resident individual. Many
       provide relief from these               loans and investments
       regimes during the 48-month             outside New Zealand may be
       exemption period.                       exposed, including mortgages
Goods and services tax                         over properties in an
                                               individual's home country.
113.   Goods and services tax (GST)
                                        116.   The transitional resident
       is a broad-based
       consumption tax on goods                exemption, if available, will
       and services supplied in New            provide temporary relief from
                                               these regimes during the
       Zealand other than exempt
       financial services and                  48-month exemption period,
       domestic rental                         but only in respect of non-
                                               New Zealand-based financial
       accommodation. GST is
       currently chargeable at the             arrangements.
       rate of 15%. Goods imported      Miscellaneous
       into New Zealand are also
       subject to GST. Exports of       117.   Although this folio is
       goods and certain services are          primarily concerned with tax
       zero rated.                             matters, we recommend that
                                               advice be sought on the
Other indirect taxes                           following topics before
114.   Other indirect taxes include            arriving in New Zealand:
       customs duties levied on                –   The availability of
       certain goods imported into                 housing and the likely
       New Zealand and                             costs of accommodation;
       miscellaneous excise duties
       levied on alcoholic beverages,          –   Educational facilities for
       tobacco products, vehicles                  children, where
       and petroleum-based fuels.                  appropriate;

                                                                     Global Mobility Country Guide (Folio)       25
Appendix A:
Overview of income tax rates
Personal income tax rates

Tax rates applicable to individuals for the period 1 April 2017 – 31 March 2018 are as follows (in NZ$):

Taxable income over           Not over                      Tax on Column 1               Percentage on excess
0                             14,000                        1,470                         10.5%
14,001                        48,000                        7,420                         17.5%
48,001                        70,000                        14,020                        30.0%
70,001                        and above                                                   33.0%

                                                                     Global Mobility Country Guide (Folio)       26
Appendix B:
Typical tax computation
Typical tax computation for 2017/18
Tax computation                       NZ$        NZ$
Salary                                120,000
Interest income                       10,000
Dividend income                       5,000
Overseas taxable income               6,000
Total taxable income                             141,000
Income tax payable
First [0 - 14,000] @ 10.5%            1,470
Second [14,001 - 48,000] @ 17.5%      5,950
Third [48,001 - 70,000] @ 30%         6,600
Fourth [70,001 - 141,000] @ 33%       23,430
Total tax                                        37,450
Overseas tax credit                   (600)
Imputation credit                     (1,400)
Tax deducted at source (PAYE)         (38,070)
Resident withholding tax              (3,550)
Residual income tax                              (6,170)
Less: Provisional tax paid                       -
Tax to pay/(refund due)                          (6,170)

27       People and Organisation
Please note that “new migrants” and certain returning New Zealanders may be exempt from New Zealand tax on
certain income (includes foreign interest and dividend income) if they obtain New Zealand tax residence after 1
April, 2006 and meet other criteria. If the exemption applies, the above calculation would change per below.

Tax computation – Transitional Resident                                               NZ$            NZ$
Salary                                                                                120,000
Interest income                                                                       10,000
Dividend income                                                                       5,000
Overseas taxable income                                                               -
Total taxable income                                                                                 135,000
Income tax payable
First [0 - 14,000] @ 10.5%                                                            1,470
Second [14,000 - 48,000] @ 17.5%                                                      5,950
Third [48,000 - 70,000] @ 30%                                                         6,600
Fourth [70,000 - 135,000] @ 33%                                                       21,450
Total tax                                                                                            35,470
Overseas tax credit                                                                   -
Imputation credit                                                                     (1,400)
Tax deducted at source (PAYE)                                                         (38,070)
Resident withholding tax                                                              (3,550)
Residual income tax                                                                                  (7,550)
Less: Provisional tax paid                                                                           -
Tax to pay/(refund due)                                                                              (7,550)

28       People and Organisation
Appendix C:
Double-taxation agreements
                                      Australia          France               Mexico             Spain
     Countries with which
     New Zealand currently            Austria            Germany              The Netherlands    Sweden
     has double taxation              Belgium            Hong Kong            Norway             Switzerland
                                      Canada             India                Papua New Guinea   Taiwan
                                      Chile              Indonesia            Philippines        Thailand
                                      China, P.R.        Ireland              Poland             Turkey
                                      Czech Republic     Italy                Russian            United Arab
                                                                              Federation         Emirates
                                      Denmark            Japan                Samoa              United
                                      Fiji               Korea                Singapore          United States
                                                         (Republic of)
                                      Finland            Malaysia             South Africa       Vietnam

Treaty negotiations and re-negotiations are continuing with a number of countries. New Zealand is currently
negotiating new DTAs or protocols with:

        Austria (2nd Protocol)

        Belgium (3rd Protocol being negotiated, 2nd protocol signed but not yet in force)

        China (DTA)

        Fiji (DTA)

        Hong Kong (2nd protocol signed but not yet in force)

        Korea (DTA)

        Luxembourg (DTA)

        Netherlands (Protocol)

        Norway (DTA)

        Portugal (DTA)

        Saudi Arabia (DTA)

        Slovak Republic (DTA)

        United Kingdom (DTA)

29       People and Organisation
Tax information
    exchange agreements

Tax information exchange agreements (TIEAs) are a limited form of a double-taxation agreement that is
concerned only with assisting in the prevention of tax avoidance and tax evasion. New Zealand has TIEAs with:

                  Anguilla          Curacao*            Marshall Islands     Sint Maarten*
                  Bahamas           Dominica            Netherlands          Turks and
                                                        Antilles*            Caicos Islands
                  Bermuda **        Gibraltar           Niue                 Vanuatu
                  British Virgin    Guernsey            Saint Vincent and
                  Islands                               the Grenadines
                  Cayman            Isle of Man         Saint Christopher
                  Islands                               and Nevis **
                  Cook Islands      Jersey              San Marino

*    The islands of Curacao and Sint Maarten are separate constituent countries within the Netherlands. The
     Netherlands Antilles TIEA continues to apply, however the agreement is now administered by each country.

** These agreements are not yet in force.

TIEA discussions are continuing with Antigua and Barbuda, Aruba, Grenada, Macao, Monaco, Montserrat,
Nauru, St. Lucia, San Marino and Seychelles.


New Zealand has entered into an agreement with the United States which helps financial institutions to
minimise compliance costs in meeting United States reporting requirements.

Multilateral Conventions

New Zealand is a party to OECD’s: Convention on Mutual Administrative Assistance in Tax Matters and
Multilateral Convention to Implement Tax Treaty related measures to prevent BEPS.

Automatic Exchange of Information (AEOI) ad Common Reporting Standard (CRS)

Although not represented by any specific treaty, the AEOI initiative provides for the exchange of FATCA-type
information under the OECD Convention on Mutual Administrative Assistance in Tax Matters and under some
DTAs. The CRS sets out the international rules for the collection and reporting of this information

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