New Zealand

Determination of residence

Residence is determined by either of the following tests:

• Permanent place of abode: Persons are deemed residents of New Zealand if they have a permanent place of abode in New Zealand regardless of how long they have been outside of New Zealand. 
• 183 days’ presence: Persons are deemed residents of New Zealand from the date of their arrival in New Zealand if they are personally present in New Zealand for a period or periods exceeding, in total, 183 days in any 12-month period. 
• Ceasing residence: Persons are deemed non-resident for New Zealand tax purposes if they are physically absent from New Zealand for more than 325 days in total in any 12-month period.

Non-residents’ exemption

A non-resident’s personal services income earned in New Zealand is exempt from New Zealand tax if all the following conditions apply:

• the visit or visits of the non-resident do not exceed, in total, a period or periods of 92 days in the income year
• the non-resident is liable for income tax on New Zealand-sourced income in their country of residence, and
• the person paying the employee/contractor is not resident in New Zealand.

The exemptions listed above do not apply to public entertainers, such as performing artists and professional athletes. They are subject to a maximum 20% withholding tax (WHT).

Special rules apply to non-resident contractors. WHT is required to be deducted from payments to non-resident contractors who do not hold valid certificates of exemption. The tax withheld is an interim tax credited against the taxpayer’s ultimate income tax liability. Non-resident contractors who are present in New Zealand for less than 92 days in any 12-month period and eligible for total relief under a DTA do not have to apply for a certificate of exemption, although they may wish to in order to obtain certainty for the payer. Also, any payments received by a non-resident contractor where the total contract payments are less than NZD 15,000 in a 12-month period will be exempt from non-resident contractor’s tax (NRCT) withheld.

The Non-Resident Visitor rules mentioned in the ‘significant developments’ section are expected to come into force from 1 April 2026 when the Tax Bill is enacted.

Double taxation agreements (DTAs)

A non-resident employee may seek relief from New Zealand tax if a DTA exists between New Zealand and the country in which the employee is a tax resident. The following conditions all must be met in order to obtain relief under a treaty:

• the recipient is present in New Zealand for no more than 183 days in any 12-month period
• the remuneration is paid by or on behalf of a non-resident employer, and
• the remuneration is not borne by a permanent establishment (branch) or a fixed base that the employer has or is deemed to have in New Zealand.

Exemptions for new migrants

A temporary (four year) exemption from income tax is available on certain foreign income derived by new migrants or New Zealanders who return to New Zealand after an absence of at least ten years. The exemption applies to people becoming resident in New Zealand on or after 1 April 2006. The exemption can only be granted once in a lifetime. Employment income from overseas employment performed while living in New Zealand and business income relating to services performed offshore is excluded.