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http://www.ird.govt.nz/yoursituation-nonres/tax-residency/
For non-residents & visitors: Tax residency New Zealand tax residency for companies and individuals
Double tax agreement between Australia and New ZealandIf you are a resident in both Australia and New Zealand, the double tax agreement (DTA) between these two countries states that you will be a resident of the country where a permanent home is available to you. See the table below for further clarification.
If ... | then you will be a resident of the country ... | you have a permanent home in both countries | where your personal and economic relations are closer. | you do not have a permanent home in either country | that you live in. | you live in both countries | that you are a citizen of. | you don't live in either of them | that you are a citizen of. | none of the above apply to you | where your effective management is situated. |
Requirements for companiesA company is resident in New Zealand if it meets any one of the following criteria:
CriteriaDescriptionIt is incorporated in New ZealandA company incorporated under the New Zealand Companies Act 1993 is resident in New Zealand.Control by company directors is exercised in New ZealandThose acting in their capacity as directors control the company here, whether decision making is confined to New Zealand or not.It has its centre of management in New ZealandThis is the place from where the company as a whole is managed on a day-to-day regular basis.It has its head office in New ZealandThe head office of a company is the office from which the business of the company is directed and carried out. The focus of the test is the physical place of administration and management which is superior to all others.
What is a permanent establishment?The DTA between Australia and New Zealand advises that a company with a permanent establishment in New Zealand will have income tax requirements here.
CriteriaDescriptionA permanent establishment for a business is a fixed place where the business activity is wholly or partly carried on.This includes:
- a place of management
- a branch
- an office
- a factory
- a workshop
- a mine, an oil or gas well, a quarry or any other place of extraction of natural resources
- an agricultural, pastoral or forestry property; and
- a building or construction site, installation or assembly project that lasts more than six months.
The company may also have a permanent establishment in other circumstances.This includes
- carrying on supervisory activities in connection with a building or construction site, installation or assembly project for more than six months, or
- carrying on activities which consist of, or which are connected with, the exploration for or exploitation of natural resources situated in New Zealand, or
- using substantial equipment in New Zealand, for or under contract with the enterprise, or
- performing any operations for the felling, removal or other exploitation of standing timber.
The company does not have a permanent establishment if it only uses facilities in New Zealand for certain activities.These are:
- storage, display or delivery of goods or merchandise
- maintenance of goods or merchandise that are used for the storage, display or delivery of the company's merchandise
- maintenance of goods or merchandise that belongs to the company but are used for processing by another entity
- maintenance of a fixed place of business that is only used for purchasing goods or merchandise or collecting information for the company
- maintenance of a fixed place of business that is used for any other activity of an introductory or supporting nature, such as advertising or scientific research.
Applying for an IRD numberIf your company is deemed to be a resident of New Zealand, you will need to apply for an IRD number by completing an IRD number application - non-individual (IR596) form.
Requirements for individualsYou are a tax resident in New Zealand if you:
- are in New Zealand for more than 183 days in any 12-month period, or
- have an "enduring relationship" with New Zealand.
What is the 183-day rule?If you are in New Zealand for more than 183 days in any 12-month period, you are considered to be a New Zealand tax resident from the date of your arrival here. The 183 days do not have to be consecutive and if you are in New Zealand for only part of a day, it will be counted as being a whole day.
What is an enduring relationship with New Zealand?A person who has a "permanent place of abode" in New Zealand is a New Zealand tax resident. "Permanent place of abode" is not just the dwelling that you live in - it covers all your social, physical, economic or personal ties and links with New Zealand. To decide if you have a permanent place of abode we look at the following:
CriteriaExamplePresence in New ZealandAre you here continuously or from time to time?AccommodationDo you own, lease or have access to property in New Zealand?Social tiesWhere does your immediate family live? Are your children being educated here? Do you belong to any New Zealand clubs, associations or organisations?Economic tiesDo you have bank accounts, credit cards, investments, life insurance or superannuation funds in New Zealand?Employment or businessDo you run a business here? Are you employed here? Do you have any employment to return to in any of your employment contracts?Personal propertyDo you have vehicles, clothing, furniture or other property or possessions kept here permanently?IntentionsDo you intend to live in New Zealand?Benefits, pensions and other paymentsDo you receive any welfare benefits, pensions or other payments from New Zealand agencies or organisations?
NoteThis list is a guide only. You can maintain similar ties, or even a physical home in other countries, but still be a New Zealand tax resident.
Applying for an IRD numberIf you have recently arrived in New Zealand and have not received income from New Zealand before, you will need to apply for an IRD number. You can do this by completing an IRD number application - individual (IR595) form.
If you have had a New Zealand IRD number before, please contact us to check that it's still valid.
Your first New Zealand individual tax returnIn your first New Zealand individual tax return as a tax resident, you must include your worldwide income from all sources from the date you arrived in New Zealand.
The year you cease to be a tax residentIf ...then ...and ...you will no longer be a tax resident and will not be receiving income from New Zealand from the date you leaveyou may need to complete an Individual tax return (IR3) up to the date of your departure- you can file your return before the end of the tax year - include any income you received from all sources to the date you leave New Zealand
- you can state that you are leaving New Zealand permanently by filling in a Refund application - people leaving New Zealand (IR50) form and sending it with your return.
We will process your return faster if we know that you are departing permanently.
you qualify for a refund or want a statement of accountwe will issue your request as soon as possibleyou need to ensure we have your overseas address.you will be receiving income from New Zealand after you stop being a tax residentyou will have to pay tax as a non-residentyou need to give us:
- your overseas address
- the date you left or intend to leave New Zealand, and
- the length of time you intend to be away.
Continuing to earn New Zealand income after you leaveIf ...then you ...and ...will be receiving income after you stop being a tax residentmust file an Income tax return - Non-resident individual (IR3NR) return to the end of the tax year (31 March) following your departureyou need to include:
- your worldwide income received until the date you left, and
- your New Zealand income received after that date.
Clearly show the breakdown of income received before and after your departure.
Recognised Seasonal Employer Scheme workersThe Recognised Seasonal Employer Scheme (RSE) is a scheme administered by the Department of Labour. Workers employed under this scheme pay a flat PAYE rate but are classed as non-resident. Further details can be found on our special types of workers page.
[size=85%]Date published: 24 Mar 2009 |
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