As a non-resident taxpayer, you'll generally pay tax on income you earn from New Zealand sources.
If you do not know your tax residency status, you'll need to work it out.
Applying for an IRD number
An IRD number is a tax identification number that you'll need in most cases if you're earning income in New Zealand.
- It allows you to pay the right amount of tax from the start instead of higher 'no-notification' rates.
How types of income from New Zealand sources are taxed
Double tax agreements
If your country or territory has a double tax agreement with New Zealand, it may affect how your New Zealand income is taxed.
Common types of income and exemptions
We've described some common types of income and exemptions in the following list.
International tax can be complex and you may want to consult a tax professional if you're in doubt about your situation.
If you're an employee, your New Zealand employer will deduct tax each time you're paid. This is called 'pay as you earn' (PAYE) and covers your income tax and an ACC earners' levy, New Zealand's accident insurance scheme.
When you start working in New Zealand, you’ll need to give your employer your IRD number and tax code.
- You provide this information on an IR330 form.
- If you do not give this information to your employer, you'll be taxed at a higher rate.
- You will usually not need to file a tax return if your only income is from New Zealand employment and you have been on the correct tax code.
Keep in mind that if you're in New Zealand for more than 183 days in a 12-month period, you'll become a New Zealand tax resident. This status is backdated to the first of those days.
Also be aware that your immigration status may not allow you to work in New Zealand. However, you still must pay tax if you do work illegally.
You can work out your tax code with our online tool or in the Tax code declaration - IR330 form.
There are special rules which apply to certain non-resident taxpayers. These rules may, for example:
- exempt certain income if the conditions are met
- set a special tax rate.
You can find out more about the following types of non-resident taxpayers. Their links are listed after the introduction on the 'Non-resident taxpayers' page.
- Diplomatic personnel
- Experts and trainees visiting from overseas
- Non-resident contractors
- Non-resident crews of visiting pleasure craft
- Non-resident employees
- Non-resident entertainers and sportspeople
- Overseas fishing crew working in New Zealand
- Recognised seasonal employer (RSE) workers.
If you're getting interest, dividends or royalties from a New Zealand source, you'll probably pay non-resident withholding tax (NRWT) on this income. In the case of interest, you may choose to pay the approved issuer levy (AIL) instead.
- If the correct rate of NRWT or AIL has been deducted and it's your only income, then you will not need to file a tax return.
- If the wrong amount of NRWT is deducted, you'll need to include the income in a tax return.
AIL is a levy of 2% instead of NRWT on certain debt. As a levy, you probably will not be able to claim it as a credit in your country or territory of tax residence, but it may be of use where you're not taxed on that interest.
There are default rates of NRWT, but if New Zealand has a double tax agreement (DTA) with your country or territory of tax residence, the rate will often be lower.
Note that different rules apply if you invest in a portfolio investment entity (PIE). See our guidance for PIEs in this list.
A portfolio investment entity is an entity which invests contributions from its investors in different passive investments. Non-resident taxpayers have a prescribed investor rate (PIR) of 28%.
However, if you become a notified foreign investor (NFI), you'll be able to invest in zero-rate or variable-rate PIEs and pay a lower rate.
If you stop being an NFI, you should consult the guide for PIEs - IR860.
If you're a non-resident taxpayer and have settled a trust overseas which has a New Zealand resident trustee, there is a special disclosure regime. If you do not meet the requirements of that regime, the exemption for foreign-sourced income will be lost.
If you're a non-resident beneficiary of a trust with income from New Zealand sources, you'll be taxed on any income and distributions you get from the trust.
- You'll need to check with the trustee to see if they deducted the tax for you.
- You may need to file a tax return depending on the type of income you get from the trust and complete an IR307 form if that income is from a foreign or non-complying trust.
A gain made from selling a property in New Zealand may be taxed if you had the intention to sell it when you bought it.
However, there are also bright-line tests which tax any gains from the sale of residential property regardless of your intention when you bought. Any gains need to be included in a tax return.
The bright-line tests apply to properties:
- bought on or after 1 October 2015 to 28 March 2018 and sold within 2 years
- bought on or after 29 March 2018 and sold within 5 years.
If you're an offshore person, you may need to have resident land withholding tax (RLWT) deducted from the sale. You can claim this amount as a credit when you include the gain in your tax return.
Any rental income you earn in New Zealand is taxable. You'll need to include this in your tax return and keep detailed receipts and records for any expenses you claim.
You may need to deduct non-resident withholding tax (NRWT) if you financed the property with certain debt from overseas. We recommend consulting a tax professional.
Filing a tax return as a non-resident taxpayer
You may need to file a Non-resident individual tax return - IR3NR to report your income from New Zealand sources. However, you do not need to file if your only income is either:
- from interest, dividends and royalties and tax has been deducted correctly.
If you become a New Zealand tax resident during the tax year, you'll need to file an Individual tax return - IR3.
- You'll need to show the breakdown between the New Zealand income you earnt as a non-resident taxpayer and your worldwide income as a New Zealand tax resident.