Returning Kiwis may face tax surprises and can easily find themselves confused in the tax minefield after their migration, especially those owning trusts or businesses abroad.
Since the common reporting standards were introduced on 1 July 2017, IRD has greater transparency of taxpayers’ overseas financial and tax affairs, so it’s prudent to make any voluntary disclosures before IRD comes knocking on the door.
At NZ International Tax & Property Advisors, we have seen Kiwi expats facing double taxation and being confused about how much money they owe and to which government. The following are a few rules to be mindful of.
- Transitional residency rules
Individuals who have not been a New Zealand tax resident for ten years since arrival in New Zealand may be exempt from paying tax on their overseas income from assets, such as rental properties, pensions or bonds, in the first four years after they have settled in New Zealand.
Transitional residency rules only apply to individuals, so income from companies and trusts are still taxed by Inland Revenue from the first day. Salaries and fees for services performed in New Zealand are also taxed from day one, and so are people still working for overseas employers.
NZ International Tax & Property Advisors can analyse your situation and determine whether you are eligible for transitional resident status.
- Double taxation
New Zealand has double taxation treaties with around 40 countries to help eliminate paying income tax twice. Taxpayers who set up corporations or trusts in other nations often have to pay taxes in both countries. NZ International Tax & Property Advisors can help navigate the double tax treaties and assist with tax planning your overseas tax affairs.
- Setting up a business
It is essential to seek advice before setting up a business in New Zealand, as the tax system may differ here. For example, the provisional tax in New Zealand is unique compared to tax haven countries like the United Arab Emirates, Channel Islands or Brunei. We can help you through the process.
NZ International Tax & Property Advisors is a chartered accounting firm providing international tax, commercial and residential property tax and consulting, accounting and training services to locals, migrants and businesses. Our experienced team has over ten years of experience supporting expats and migrants through their cross-border financial journeys. Contact us now to ensure you aren’t facing any tax issues on your return to New Zealand! We offer a free 30-minute consultation to discuss your situation.
For more information, visit our website at https://nztaxprop.co.nz/.