rests with the employer. Employers are also generally responsible for reporting employment income on behalf of employees and for correctly withholding income taxes through the Pay-As-YouEarn (PAYE) withholding tax system.
For employees without tax file numbers, employment income is subject to PAYE at a rate of 45%. Unless a tax file number is obtained and the employer’s reporting is retrospectively amended to reflect the number, this rate is effectively a final liability for the employee.
Gross income includes all salaries, wages, bonuses, retirement payments and other compensation. Employer-paid items, including reimbursing payments, allowances such as hardship allowances, meal allowances and cost-of-living allowances, tuition for dependent children, per diems, and payments made on an employee’s account are generally considered gross income as a starting point. The value of employer-provided or reimbursed accommodation is also generally included in an employee’s gross income.
There are exemptions for particular employer payments and reimbursements, including for certain meals, accommodation, travel, relocations and other employment-related expenses in limited circumstances. For example, there is an exemption for employer-provided or reimbursed accommodation for up to three months after arrival as a result of a work-related relocation. Other specific exemptions include accommodation provided for out-oftown secondments or capital projects (subject to time limits), multiple-workplace situations, certain mobile or remote workplaces, and some shift worker accommodation.
The provision of benefits in kind to employees is generally subject to New Zealand’s fringe benefit tax regime and does not form part of an employee’s gross income. Benefits subject to the fringe benefit tax regime rather than the income tax regime include the availability of a motor vehicle for private use, employees’ education expenses, medical insurance premiums, certain pension plan contributions, life insurance premiums, imputed interest on below-market rate loans, non-cash gifts or prizes, and other goods and services provided to employees.
Employers are subject to fringe benefit tax on pension or retirement savings contributions that are not otherwise subject to withholding taxes in New Zealand.
New Zealand has a work-based retirement savings initiative called KiwiSaver. Most New Zealand registered employers must make compulsory contributions to a KiwiSaver fund or a complying superannuation fund for all eligible employees who have elected to participate. To be eligible, employees must satisfy all of the following conditions:
• They must be New Zealand citizens or entitled to live permanently in New Zealand.
• They must normally live in New Zealand.
• They are under 65 years old.
Employers are subject to withholding tax on all KiwiSaver contributions.
dividends are fully imputed or to the extent that imputation credits are passed on through the payment of supplementary dividends under the foreign investor tax credit regime. The rate is reduced to 0% to the extent that noncash dividends are fully imputed.
A 0% rate also applies to fully imputed cash dividends paid to nonresidents if the nonresidents have a direct voting interest of at least 10% in the paying entity or if a double tax treaty would reduce the New Zealand tax rate below 15%.
Nonresidents are subject to withholding tax at a rate of 15% for interest and royalties. Certain double tax treaties may reduce this rate.
Nonresident withholding tax is a final tax on dividends, cultural royalties and interest paid to non-related persons. It is a minimum tax on non-cultural royalties and on interest paid to related persons. Nonresident withholding tax rates may be reduced under New Zealand’s double tax treaties. A 0% rate of nonresident withholding tax may apply to interest paid to unrelated nonresidents by transitional residents (see Transitional residents’ exemption in section A) in relation to money borrowed while they were nonresidents, so long as the interest does not relate to carrying on a business through a fixed establishment in New Zealand.
As an alternative to nonresident withholding tax on interest, if the borrower and lender are not related persons and if the interest is paid by a person registered as an approved issuer with respect to a registered security, the interest may be subject only to an approved issuer levy of 2% of the interest actually paid. The New Zealand government pays the 2% levy on interest paid on its loans from nonresidents that meet these criteria. Nonresident withholding tax and approved issuer levy may be imposed at a rate of 0% on interest paid to nonresident holders of certain widely held corporate bonds and similar securities.
The foreign investor tax credit (FITC) provisions reduce the effective rate of New Zealand tax imposed on dividends received by a nonresident investor from a New Zealand company. To the extent that a New Zealand company is owned by nonresident investors and imputation credits are attached to dividends paid, the company may claim a partial refund or credit of its New Zealand company tax liability. The company then passes on the refund or credit to the nonresident investors through supplementary dividends. The effective rate of tax on fully imputed dividends received by nonresident investors with supplementary dividends under the FITC provisions is 28%, which effectively equates to the company tax rate on the company’s underlying profits and the extent of the credits passed to resident investors. However, the residents may need to pay further tax, depending on their individual marginal tax rates. The FITC mechanism is intended to allow nonresident investors to claim a full tax credit in their home countries for New Zealand nonresident withholding tax.
The FITC provisions generally apply for dividends paid to nonresidents only if they hold less than 10% direct voting interests and if the New Zealand tax rate, after any double tax treaty relief, is at least 15%.
Attributed income from controlled foreign investments. Under the controlled foreign company (CFC) regime, New Zealand residents may be taxed on passive income attributed to them that is derived by foreign entities in which they hold an interest if either of the following circumstances exists:
• Five or fewer New Zealand residents own over 50% of the foreign entity.
• New Zealand residents have de facto control of the company.
Exemptions from CFC attribution may apply if the CFC is resident in Australia and meets certain criteria or if the CFC’s income meets a 95% active income test.
Under the foreign investment fund (FIF) regime, New Zealand residents may be taxed on income attributed to them that is derived by foreign entities in which they hold an interest not meeting the conditions for the applicability of the CFC regime. The FIF regime may apply to interests in the following:
• Companies and unit trusts
• Foreign superannuation schemes (however, different rules apply to some schemes, effective from 1 April 2014; see Foreign superannuation scheme interests)
• Foreign life insurance policies that have an investment component
Several exceptions apply, including exemptions for the following:
• Shares held in certain Australian companies listed on the Australian Stock Exchange
• Certain Australian unit trusts or superannuation schemes
• Individuals holding FIF investments that cost less than NZD50,000 in total
• Certain interests in employment-related foreign superannuation schemes and qualifying foreign private annuities
• Holdings of transitional residents
Investors who own interests of less than 10% in foreign companies, unit trusts, superannuation funds and life insurance policies can calculate their FIF income under the fair dividend rate method (FDR). Under the FDR method, investors are taxed on 5% of the market value of investments held at the beginning of the year and up to 5% of gains made as a result of the purchase and subsequent resale during the same tax year. Dividends and capital gains are not separately taxed under this method.
An active income exemption and approach, similar in some respects to that applying for interests in CFCs, may apply with respect to direct income interests of at least 10% in FIF companies and unit trusts.
Transitional residents (see Transitional residents’ exemption) are exempt from the attribution of CFC or FIF income.
Foreign superannuation scheme interests. In certain circumstances, individuals who have applied FIF treatment to foreign superannuation scheme interests in previous returns of income may continue to apply FIF treatment to those interests. Otherwise, effective from 1 April 2014, the FIF rules do not apply to interests in foreign superannuation schemes that were first acquired by individuals when they were nonresidents. Interests that were
sold before 1 July 2024. For property sold on or after 1 July 2024, the profits on the sale may be taxable if the property was acquired within two years of the sale date.
From 1 July 2016, residential land withholding tax (RLWT) applies to the sale of residential property located in New Zealand by “offshore RLWT persons” if the land was acquired on or after 1 October 2015 and is sold within a two-year period. This two-year period is extended to a five-year period if the taxpayer enters into an agreement to purchase residential property on or after 29 March 2018. The five-year period is extended to a 10-year period if the taxpayer enters into an agreement to purchase residential property on or after 27 March 2021. These rules continue to apply to property sold before 1 July 2024. For property sold on or after 1 July 2024, the profits on the sale may be taxable if the property was acquired within two years of the sale date. An “offshore RLWT person” is defined broadly for individuals and other entities, with reference to citizenship, immigration status and physical absence throughout specific time frames for an individual vendor. RLWT is not a minimum or final tax but is deducted on account of any annual income tax liability. Any excess RLWT is refundable.
An accrual taxation system applies to New Zealand resident individuals who are parties to various types of financial arrangements, including debts and debt instruments. Under the accrual system, foreign-exchange variations related to the financial arrangements are included in calculations of income and expenditure. A cashbasis system may be adopted by taxpayers deriving income and incurring expenditure of less than NZD100,000 from financial arrangements in an income year and by taxpayers with financial arrangement assets and liabilities with a total absolute value of NZD1 million or less. For the cash basis to apply, the cumulative difference between the actual income and expenditure and the notional income and expenditure on an accrual basis must be less than NZD40,000.
The accrual taxation regime does not apply to nonresidents, unless the transaction involves a business they carry on in New Zealand, or to transitional residents if the other parties to an arrangement are nonresidents and if the arrangement is not for the purposes of a business carried on in New Zealand by any of the parties.
Deductions
Deductible expenses. Employees are not permitted deductions for employment-related expenditure, except for tax return preparation fees and premiums for loss of earnings insurance if the insurance proceeds would be taxable. However, employers are able to reimburse employees on a tax-free basis for certain expenses that relate to the employee’s employment.
Personal deductions and allowances. Taxpayers with dependent children may be entitled to family support payments based on family size, income and other circumstances. This assistance is generally not available to nonresidents or transitional residents.
An independent earner tax credit (IETC) may apply to individual tax residents who have annual income between NZD24,000 and NZD70,000 and who do not directly or indirectly receive family support, income-tested benefits, New Zealand superannuation,
D. Tax filing and payment procedures
The tax year in New Zealand runs from 1 April to 31 March of the following calendar year. Salary and wage earners generally have tax deducted from their salaries at source under the PAYE system. Income tax on other income is generally due on 7 February (7 April if on a tax agency list) following the end of the fiscal year.
Individuals who earn income only from reported sources (for example, employment income, bank interest and dividends) in New Zealand do not generally have a return filing requirement. Instead, these individuals are generally provided with automated assessments. Individuals who have income from reported sources and from unreported sources are required to amend any automated assessment to reflect their unreported income correctly.
If an automated assessment results in a refund, this will be paid by electronic transfer to the individual’s nominated bank account. Assessments of tax to pay are written off if under NZD50.
An individual with unreported income may choose (or in some cases, be required) to file an income tax return. Income tax returns are due by the 7 July immediately following the end of the income year, or by the following 31 March if on a tax agency list.
Certain taxpayers must pay advance payments of provisional tax, generally in the fifth, ninth and 13th months following the beginning of their income years. These taxpayers are generally persons whose preceding year’s tax liability on income from which no tax was withheld was greater than NZD5,000 if the preceding tax year was the tax year ended 31 March 2020 or a future tax year. The rules relating to the imposition of interest on the late payment of provisional tax have changed several times in recent years. For provisional tax payable with respect to the year ended 31 March 2023 and future tax years, interest may be imposed on persons whose tax liability on income from which no tax was withheld was greater than NZD60,000 if the provisional tax paid by each installment date is less than the minimum amounts deemed due at those installment dates. Interest may also be imposed from the third installment date on persons whose tax liability on income from which no tax was withheld was greater than NZD60,000 if the provisional tax paid by the third installment date is less than the actual tax liability for the year.
A nonresident individual must file an income tax return showing all taxable New Zealand-source income, except income subject to a final nonresident withholding tax.
From 1 October 2015, “offshore persons” must generally have a fully functional New Zealand bank account to obtain a tax identification number, which is necessary to meet their tax filing and payment obligations. Individuals without a New Zealand bank account are generally required to satisfy comprehensive due diligence documentation requirements, including providing notarized copies of identification documents and proof of a bank account held in a country with which New Zealand has an exchange-of-information agreement in order to satisfy the Commissioner of Inland Revenue of the applicant’s identity and background.
E. Double tax relief and tax treaties
If a New Zealand resident derives income from a foreign jurisdiction, foreign income tax paid on that income is allowed as a credit against income tax payable in New Zealand. The credit is limited to the amount of tax payable in New Zealand on the same foreign-source income.
New Zealand has entered into comprehensive double tax treaties with the following jurisdictions.
Australia Indonesia Samoa
Austria Ireland Singapore
Belgium Italy South Africa
Canada Japan Spain
Chile Korea (South) Sweden
China Mainland Malaysia Switzerland
Czech Republic Mexico Taiwan
Denmark Netherlands Thailand
Fiji Norway Türkiye
Finland Papua New United Arab France Guinea Emirates
Germany Philippines United Kingdom
Hong Kong Poland United States
India Russian Federation Vietnam
New Zealand has also signed a double tax treaty with the Slovak Republic which enters into force on 1 November 2024 and into effect in 2025.
F. Temporary visas
New Zealand Electronic Travel Authority. All travelers to New Zealand from visa-waiver jurisdictions (see list below), and travelers who hold a valid Australian Permanent Resident Visa or Australian citizenship are required to obtain a travel authorization through Immigration New Zealand’s Electronic Travel Authority (NZeTA) system before traveling to New Zealand.
Travelers should apply for the NZeTA as soon as their plans are confirmed. It is strongly advised that they apply no later than 72 hours before travel to New Zealand. An approved NZeTA travel authorization is valid for multiple entries into New Zealand and is generally valid, unless revoked, for up to two years. An NZeTA is not a guarantee of admission to New Zealand. Travelers on an NZeTA are required to meet entry requirements at the border (for example, funds, genuine intention to stay as a visitor).
Visitors’ visas. In general, all visitors to New Zealand must apply for a visa to enter the country. Some exceptions to the general rule exist. Travelers from visa-waiver jurisdictions, Australian citizens and individuals who hold a current Australian permanent residence visa are directed to apply for the NZeTA instead of a formal New Zealand visitor visa. The NZeTA is a travel authority to allow boarding in an aircraft. The actual visa will be granted at the border prior to entry.
United Kingdom passport holders who produce evidence of the right to reside permanently in the United Kingdom can be granted a visitor visa for up to six months on arrival in New Zealand. Individuals from certain jurisdictions (see below) who will be in
• He or she must not have been previously approved for a visa under a working holiday scheme.
Applicants who apply for a working holiday visa are not required to provide evidence of a job offer. If a scheme has an “ordinarily resident” requirement, the applicant must apply under the country of permanent residence. This requirement is considered to be met if the applicant has not been absent from that country for more than two years immediately preceding the application. Successful applicants must not undertake permanent employment unless they apply for, and obtain, a work visa that allows such employment. Successful applicants may also enroll in one or more courses of training or study of up to six months’ duration in total during their visit to New Zealand.
Work visas. From 4 July 2022, six existing temporary work visas (including the Essential Skills and Talent Visa referenced below) have been replaced with a single Accredited Employer Work Visa (AEWV) and a mandatory accreditation process has been established for any New Zealand business intending to support a migrant worker for an AEWV temporary work visa.
From April 2024, the maximum continuous stay was changed as outlined in the following table.
Category Years
Australian and New Zealand Standard Classification of Occupations 8 (ANZSCO) Skill Level 1, 2, or 3, on the Green List, on the on the Transport Sector: Work to Residence instructions or paid at or above 1.5 times the median wage 5
ANZSCO Skill Level 4 or 5 3
The visa holders will have a stand-down period of 12 months after completing the allowed maximum continuous stay. This means that AEWV holders who do not have a pathway for residency must leave New Zealand for at least 12 months after meeting the limit on the maximum continuous stay. However, if the AEWV holder can demonstrate that they are on a pathway to skilled residence they may be granted a further AEWV (without undergoing the stand-down period).
All work visa applicants must meet the generic temporary entry instructions. This includes health and character requirements.
The Specific Purpose or Event instructions apply if the applicant is entering New Zealand for a specific purpose or event (for example, a short-term intercompany secondment). The applicant is required to have demonstrated skills, expertise or attributes that are likely to benefit individuals and/or New Zealand while proving there is no negative impact on opportunities for New Zealand citizens or residents. Under these instructions, a labor market test is not required, but the employer is required to provide either a support letter or a copy of the job offer or assignment agreement. Work visas under the Specific Purpose or Event instructions are generally valid for the duration of the activity in New Zealand.
There are special categories open to partners of New Zealand citizens or residents, partners of higher-skilled work visa holders, entertainers, athletes and professional coaches.
The processing time for a work visa varies with each application, but the process generally takes four to eight weeks from the date of filing if no medical or character issues exist.
Health and character requirements for all visa applicants. All individuals who enter New Zealand must meet applicable good health and character requirements. If an applicant is not from a low-tuberculosis incidence country and intends to be in New Zealand for more than six months, he or she must obtain a chest X-ray certificate from a panel radiologist. If an applicant intends to be in New Zealand for longer than 12 months, he or she must obtain full medical and chest X-ray certificates from a panel physician. The panel physician and/or panel radiologist submits the medical and chest X-ray certificates directly to INZ online. Once the medical and chest X-ray certificates are submitted electronically, the applicant has three months to file his or her visa application with INZ. If an applicant is applying for a temporary visa and intends to be in New Zealand for 24 months or longer, he or she must also obtain a police clearance certificate from his or her country or countries of citizenship and any country in which he or she has lived for five years or more since the age of 17. If an applicant is applying for a residence visa, he or she must obtain a police clearance certificate from his or her country or countries of citizenship and any country in which he or she has lived for 12 months or more in the last 10 years. Police clearance certificates are only valid for filing within six months after the date of issuance.
General requirements for all temporary visitors (work and holiday) to New Zealand. An applicant coming to New Zealand to work must provide evidence of qualifications and/or work experience, and a job offer. Applicants coming for a visit must provide evidence that they plan on leaving New Zealand and that they have funds to support themselves while in New Zealand. All applicants must also hold a valid passport for the duration of their intended stay.
G. Entrepreneur category visa
Experienced businesspersons who wish to obtain a work visa to enter New Zealand to establish and operate a business can apply under the Entrepreneur work visa category. If certain conditions are met, the applicant can eventually obtain New Zealand residence under the Entrepreneur residence visa category. To apply for an Entrepreneur work visa, applicants must satisfy the following requirements:
• They must have a minimum capital investment of NZD100,000.
• They must meet or exceed the pass mark on a scale that awards points for factors relating to the likely success of the proposed business and its value to New Zealand.
• They must be competent users of English.
• They must have a business plan, which is assessed by Immigration New Zealand as having the ability to be profitable and provide “substantial benefit” to New Zealand.
• They must all meet health and character requirements.
New Zealand. In general, a person who holds a work visa that entitles the person to remain in New Zealand for two years or more is eligible for publicly funded health and disability services. Eligibility for all publicly funded health and disability services is determined by the Ministry of Health and not INZ.
Licensed immigration advisors. Anyone who provides immigration advice, both onshore and offshore, must be licensed or exempt from licensing. Immigration advice is defined in the Immigration Advisers Licensing Act 2007 as “using, or purporting to use, knowledge of or experience in immigration to advise, direct, assist or represent another person in regard to an immigration matter relating to New Zealand, whether directly or indirectly and whether or not for gain or reward.” The Immigration Advisers Authority regulates the provision of immigration advice. INZ no longer accepts applications from representatives of applicants, unless they are licensed or exempt.
A person who provides immigration advice who is not licensed or exempt from licensing is liable to imprisonment for a term not exceeding seven years or a fine not exceeding NZD100,000, or both.