Tax Residency and Tax Planning

The country you are a tax resident of normally has the right to tax your worldwide income. Becoming a tax resident of New Zealand usually requires that you are in the country for more than 183 days in a 12 month period, or that you have an enduring relationship with the country (even if you are in the country for less than 183 days).

It is harder to lose your tax residency status. If you are away from New Zealand for more than 325 days in a 12 month period you may lose your tax residency – unless you have retained enduring ties with New Zealand. If you have enduring ties in New Zealand you may remain a tax resident indefinitely, no matter how long you are out of the country.

Many people face issues with being deemed as tax residents of more than one country or they have uncertainty over which country they are a tax resident in. Double tax treaties provide a way to resolve these issues.

In other cases, tax residency is an important tax planning issue. As a migrant, high net worth investor, or an employee of a multi national company, you may have income of a particular type, or for a particular time period, that you either do or do not want to have taxed under New Zealand law. It is important to examine the implications for you before you take steps to relocate to or from New Zealand to ensure that valuable tax benefits aren’t lost.

Contact:

Kristina Andersen
Andersen Accountants Limited
Telephone: 09 3695198
Email: Kristina@andersen.co.nz
Website: www.andersen.co.nz