Tax in New Zealand - Tax New Zealand
Paying Tax New Zealand
If you are planning on living in New Zealand for any length of time, you may have to pay taxes. Failure to do so can result in large penalties.
If your stay is less than six months and you don’t earn any income during this time, you are classified a non-resident for tax purposes and as such, are excempt from paying tax.
Income can include interest earned on bank accounts. If you earn any interest on an account held in New Zealand, you will need to provide the tax office with an IRD number. If you don’t do this, you will be taxed at a fairly high ‘non-declaration’ rate.
Your IRD number is an individual tax number supplied by the Inland Revenue Department (IRD). Contact the IRD on free call 0800 227 774 to get an IRD number. Their office hours are 8am – 8pm Monday to Friday and 9am – 1pm on Saturdays.
You will have to pay tax in New Zealand if you earn an income for more than six months or 183 days in any 12 month period. Once your have provided your employer your IRD number, they will deduct tax from your weekly salary. If you earn over a certain amount, you may be entitled to tax rebates and will have to lodge a tax return. You can do this yourself (the IRD website has a simple process for filing tax returns) or through a chartered accountant. An accountant will charge a fee for their services but their knowledge of the tax system generally means you will receive a higher return.
Penalties for not paying tax can be financially crippling and can sometimes result in a criminal record. As a general rule, you should apply for an IRD number once you arrive in the country. A chatered accountant can provide you with any more information you may need.
Tax New Zealand
Understanding the tax system
If you stay for more than six months in New Zealand or have a enduring relationship with New Zealand as defined by the Inland Revenue Department, you are considered a "resident" for tax purposes.
Tax file number
When working as an employee in one of the New Zealand jobs, you are required to produce your tax file number. Applications for tax file numbers can be made at the Inland Revenue Department.
Resident withholding tax (RWT)
Any money held in a New Zealand bank account will have RWT deducted from it by the bank on behalf of the government. The rate of deduction will be higher if no tax file number is produced and this applies even to people who are not working.
People who stay in New Zealand for less than six months will be classified as "non-residents" for tax purposes but will be required to pay tax on any income earned while gathering work experience in New Zealand.
The financial year
The financial year runs from the 1st of April to the 31st of March.