If I emigrate (or return) to New Zealand, am I eligible for tax concessions?
Tax savings opportunity A tax savings opportunity is available for some persons taking up residency in New Zealand. The exemption arose because the government wishes to assist businesses seeking to attract and employ skilled and knowledgeable individuals, whether they are returning New Zealanders who have been living and working overseas for an extended period or others.
The exemption period and its intended effect The temporary exemption is available from income tax on foreign-sourced income derived for approximately 48 months from the date of arrival, and may be claimed only once. It excludes certain income from employment and personal services. The exemption period, which ends if a person becomes a non-resident, can be up to four years and one month. The exemption applies to persons who become transitional residents on or after 1 April 2006.
Contact us to understand if you are eligible for this exemption.
A word on NZ tax residence In New Zealand as in other countries , a person’s liability to income tax depends on the person’s residence status. This concept of residence is based mainly on the “permanent place of abode” test or on a quantitative test. Residence of a taxpayer is important for a number of tax-related matters, including:
• the international tax regime • dividend imputation • non-resident withholding tax • double tax treaties • tax rates, and • foreign losses
Trusts Some persons considering relocating to New Zealand may be a settlor, trust or beneficiary of an existing trust, or wish to form a trust before they emigrate. You should seek our professional advice sould be sought on the law in New Zealand for taxation of trusts before emigration takes place.
