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Introduction
This booklet gives you a brief introduction to the different kinds of taxes that Inland Revenue collects in New Zealand. Weve written it mainly for new residents and potential immigrants to New Zealand. We also explain family assistance which is nancial help available from Inland Revenue if you meet the criteria. In this booklet, when we refer to a New Zealand resident, we mean a New Zealand resident for tax purposes. On page 17 youll nd a list of other Inland Revenue publications. These will give you more detailed information if you want to know more about the topics covered in this booklet. You can get these publications from our website www.ird.govt.nz or order a copy by phoning our automated telephone service INFOexpressplease see page 18.
The information in this booklet is based on current tax laws at the time of printing.
Contents
Introduction Part 1 General information New Zealands tax system Tax residence Paying tax as a resident Becoming a non-resident Paying tax as a non-resident Double tax agreements IRD numbers Balance dates Part 2 Types of taxes and duties Income tax Goods and services tax Family assistance Accident compensation Resident withholding tax International tax rules Trusts Gift duty Child support For more help Forms and publications Inland Revenues website INFOexpress Call recording Privacy Act 1993 2 4 4 5 7 7 8 8 9 9 10 10 11 11 13 13 14 15 15 16 17 17 18 18 18 19
Tax residence
The residence rules set out in the tax laws are different from the normal citizenship rules. Having New Zealand citizenship or permanent residence doesnt necessarily mean you are a resident for tax purposes. On the other hand, you could be a resident for tax purposes but not hold citizenship here. As an individual, you are a New Zealand resident for tax purposes if you meet any of these three conditions: You are in New Zealand for more than 183 days in any 12-month period. You have an enduring relationship with New Zealand (see page 6). You are away from New Zealand in the service of the New Zealand Government.
We consider
whether you are here continuously or from time-to-time whether you own, lease or have access to property in New Zealand where your immediate family lives, if you have children being educated here, if you belong to any New Zealand clubs, associations or organisations if you have bank accounts, credit cards, investments, life insurance or superannuation funds here if you run a business here, if you are employed, if you have employment to return to, the terms of any employment contract if you have vehicles, clothing, furniture or other property or possessions kept here permanently whether you intend to live in New Zealand or return overseas after a time whether you receive any welfare benets, pensions or other payments from New Zealand
Economic ties
Employment or business
Personal property
Intentions
This list is a guide onlyits necessary to consider your overall situation when working out whether youre a New Zealand tax resident.
Please note that even if you maintain ties (or even a physical home) in other countries, you can still be a New Zealand tax resident. As long as you have an enduring relationship with New Zealand you will always be a resident. This test overrides any rules about the number of days you are here. If you are a New Zealand tax resident, and also a tax resident of another country under that countrys tax laws, its possible that you could be taxed twice on the same income. To avoid this, New Zealand has double tax agreements with many other countries. These agreements are explained on page 8.
Note
In New Zealand the tax on each persons income is calculated separately. For example, there are no joint assessments for a husband and wife.
Becoming a non-resident
Remember that if you have an enduring relationship with New Zealand you will be a resident for tax purposes. However, if the ties and links described on page 6 suggest youre not a New Zealand tax resident, you can become a non-resident under the 325-day rule.
To get more details about any of these, phone us on 0800 227 774 if you are a salary or wage earner, or 0800 377 774 if you are in business.
Example
IRD numbers
You will need to ll in an IRD number application individuals (IR 595) form, or if you are intending to start a business, an IRD number application nonindividuals (IR 596) form if you are required to pay tax in New Zealand. If you are going to claim family assistance (see page 12) you will also need to complete an IRD number application children (IR 594) for all the children you are applying for. To get any of these application forms please phone us on 0800 227 774 (for salary and wage earners, and family assistance applications) or 0800 377 774 (for self-employed or people in business). Alternatively, you can also go to our website www.ird.govt.nz When applying for an IRD number you will also have to show us some identication, eg a birth certicate or current passport. Once you have your IRD number please have it handy whenever you call Inland Revenue.
Balance dates
New Zealands tax year runs from 1 April to 31 March. Some individuals and all self-employed people and businesses have to ll in a tax return after 31 March each year, to declare all their income and tax paid. Some self-employed people and businesses have a balance date other than 31 March, for example, some farmers have a 30 June balance date. Depending on the circumstances, we may give approval for other self-employed people and businesses to have a different balance date.
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Income
up to $38,000 $38,001 to $60,000 $60,001 and over
Taxed at
19.5% 33% 39%
However, there are some rebates that reduce the amount of tax you may have to pay if your income is mainly from salary, wages, self-employment or a social security benet, and your total income is below $38,000. If your income is from salary, wages or a social security benet, your tax will be deducted under the pay-as-you-earn (PAYE) system. This means the pay you get in your hand has already had tax deducted. If your employer provides non-cash benets as part of your employment package, they will pay fringe benet tax on these benets. You will not be taxed on these benets.
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You may earn income that doesnt have tax deducted before you receive it (such as income from running your own business). In this situation (other than your rst year in business) youll generally have to pay your tax in three instalments during the year. This is called provisional tax. When you le your tax return at the end of the nancial year, the provisional tax youve already paid will be offset against the end-of-year tax amount you owe.
Family assistance
Family assistance is nancial help for working families. How much you can receive depends on: how many children 18 years or under are living at home with you how much money you and your partner make from your jobs where your income comes from. Family assistance has four parts: Family support (FS) Parental tax credit (PTC) Child tax credit (CTC) Family tax credit (FTC)
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Family support is paid by Inland Revenue to low to middle-income working families. Every fortnight, the money is paid straight into your bank account. Each familys circumstances are different, so the amount you receive may be different from the amount other families receive. Parental tax credit is paid for up to eight weeks to most working families when a child is born. Child tax credit is a top-up of family support for working parents. Family tax credit is paid to families to bring their income up to at least $18,368 a year ($286 after tax each week), where at least one parent is working for salary or wages. The table below is a guide to what you can expect to receive, depending on your total family income and the number of children in your care.
Fortnightly payments Family income each week before tax $ 182 183 to 221 222 to 259 260 to 298 299 to 336 337 to 391 392 to 413 414 to 451 452 to 490 491 to 519 520 to 548 549 to 576 577 to 605 606 to 634 635 to 663 664 to 692 693 to 721 722 to 750 751 to 778 779 to 807 808 to 836 837 to 865 866 to 894 895 to 923 924 to 951 952 to 980 Family income each year before tax $ 9,500 9,501 to 11,500 11,501 to 13,500 13,501 to 15,500 15,501 to 17,500 17,501 to 20,356 20,357 to 21,500 21,501 to 23,500 23,501 to 25,500 25,501 to 27,000 27,001 to 28,500 28,501 to 30,000 30,001 to 31,500 31,501 to 33,000 33,001 to 34,500 34,501 to 36,000 36,001 to 37,500 37,501 to 39,000 39,001 to 40,500 40,501 to 42,000 42,001 to 43,500 43,501 to 45,000 45,001 to 46,500 46,501 to 48,000 48,001 to 49,500 49,501 to 51,000 1
FS CTC PTC
2 $ $ $ 60 60 60 60 60 60 60 60 60 60 60 60 60 60 60 60 53 35 18 1 $ $
Number of children 3 4 $ $ $ $ $ $
5 $ $ $
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FS CTC PTC
$ 94 94 94 94 94 94 86 72 58 48 32 15
$ 30 30 30 30 30 30 30 30 30 30 30 30 28 11
300 158 300 158 300 158 300 158 300 158 300 158 300 150 300 136 300 122 300 112 300 300 300 300 293 276 259 241 224 207 189 172 155 137 120 103 96 79 62 45 27 10
300 222 300 222 300 222 300 222 300 222 300 222 300 214 300 200 300 186 300 176 300 160 300 143 300 126 300 109 300 300 300 300 300 300 283 266 249 231 214 197 91 74 57 39 22 5
90 300 286 120 300 350 150 300 414 180 300 90 300 286 120 300 350 150 300 414 180 300 90 300 286 120 300 350 150 300 414 180 300 90 300 286 120 300 350 150 300 414 180 300 90 300 286 120 300 350 150 300 414 180 300 90 300 286 120 300 350 150 300 414 180 300 90 300 278 120 300 342 150 300 406 180 300 90 300 264 120 300 328 150 300 392 180 300 90 300 250 120 300 314 150 300 378 180 300 90 300 240 120 300 304 150 300 368 180 300 90 300 224 120 300 288 150 300 352 180 300 90 300 207 120 300 271 150 300 335 180 300 90 300 190 120 300 254 150 300 318 180 300 90 300 173 120 300 237 150 300 301 180 300 90 300 155 120 300 219 150 300 283 180 300 90 300 138 120 300 202 150 300 266 180 300 90 300 121 120 300 185 150 300 249 180 300 90 300 103 120 300 167 150 300 231 180 300 90 300 90 300 77 300 60 300 43 300 25 300 8 300 291 86 120 300 150 150 300 214 180 300 69 120 300 133 150 300 197 180 300 51 120 300 115 150 300 179 180 300 34 120 300 17 120 300 119 300 102 300 85 300 98 150 300 162 180 300 81 150 300 145 180 300 63 150 300 127 180 300 46 150 300 110 180 300 29 150 300 93 180 300
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Accident compensation
New Zealand has a comprehensive accident insurance scheme which covers the costs of all work and non-work-related accidents. The Accident Compensation Corporation (ACC) administers this scheme. Premiums for cover are paid by employers and self-employed people directly to ACC. Inland Revenue collects employees premiums on behalf of ACC, as part of the PAYE tax system.
Rates of RWT
The rate at which RWT is deducted from your interest depends on: the date on which the interest is paid or credited whether or not you have given your IRD number to the person or organisation who is paying you interest your income level.
Total income
up to $38,000 $38,001 to $60,000 $60,001 and over
RWT rate
19.5% 33% 39%
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You can elect to have your interest deducted at the correct rate or a higher rate to avoid an end-of-year tax bill. You should elect either 33% or 39% if your gross income is over $38,000.
Note
If a nancial institution does not have a clients IRD number, it will deduct RWT at the no-declaration rate of 39%.
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Trusts
If you are a settlor, trustee or beneciary of a trust outside New Zealand, there are some trust tax rules you may need to know about. See our booklet Trusts and estates income tax rules (IR 288) for more information.
Gift duty
A New Zealand resident who gives gifts with a total value of $27,000 or more in any 12-month period must pay gift duty on those gifts. The following table gives the rates of gift duty:
Value of gift
$0 to $27,000 $27,001 to $36,000 $36,001 to $54,000 $54,001 to $72,000 over $72,000
Rate of duty
Nil 5% of amount over $27,000 $450 plus 10% of amount over $36,000 $2,250 plus 20% of amount over $54,000 $5,850 plus 25% of amount over $72,000
Anyone who gives gifts worth over $12,000 in any 12-month period has to le a Gift statement (IR 196) with Inland Revenue, even if there is no duty payable on these gifts. See our booklet Gift duty (IR 194) for more information. You can get these from our website or order copies by phoning INFOexpresssee page 18.
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Child support
Child support is money paid by parents not living with their children to help nancially support those children, when: a couple who have children split up, or two people have children and are not living together. Child support is not a tax, it is a payment administered by Inland Revenue. Inland Revenue Child Support assesses the amount the paying parent needs to pay and collects this money. It is then passed on to the person looking after the children to help with the costs of bringing up the children, or to the government where the carer is receiving a sole parent rate of benet, to help offset the cost of the benet. Some parents pay nancial support directly to the other parent without the money passing through Inland Revenue Child Support. This can happen when the person caring for the children is not receiving a sole parent rate of benet. For more information about child support, please call 0800 221 221.
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INFOexpress
INFOexpress is our automated telephone service. These are some of the things you can do by phoning INFOexpress: order Inland Revenue forms and booklets get tax payment information get updates on your account balances (income tax, GST, employer accounts for PAYE, child support, SSCWT, FBT and student loans) request or change a personal identication number (PIN). All you need to use INFOexpress is a touch tone phone and your IRD number. Its also helpful if you know the number of any forms or booklets you are ordering. For personal information, such as account balances, youll also need an INFOexpress PIN. You can get a PIN by phoning 0800 257 777 and following the instructions given. INFOexpress is available between 6 am and 12 midnight, seven days a week. You can call these numbers for: Forms and stationery Taxpacks All other services 0800 257 773 0800 257 772 0800 257 777
Call recording
As part of our commitment to providing the best possible service to our customers, Inland Revenue records all telephone calls received through our call centres. Please visit our website at www.ird.govt.nz or contact us on 0800 377 774 for further information about our call recording policy and how you can access your recorded information.
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