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Resources : New Zealand
Trigg on Tax - A Summary of New Zealand Taxation

New Zealand Residency

New Zealand imposes income tax on a residency/source basis. It taxes residents on total worldwide income. It taxes non-residents on New Zealand sourced income only.

Tax Residency

Under domestic legislation, an individual becomes New Zealand tax resident where: [a] they have been personally present in New Zealand for 183 days in any 365 days; or [b]they have established a permanent place of abode (PPOA) in New Zealand.

Permanent Place of Abode

The meaning of PPOA has occupied both the Commissioner and the Courts for some time. The Commissioner of Inland Revenue [CIR] appealed a decision of the High Court, which in turn overruled decisions of the CIR and Taxation Revenue Authority that favoured the CIR. The Court of Appeal has confirmed the decision of the High Court.

The ordinary meaning of "to have a permanent place of abode in New Zealand" is "to have a home or property in New Zealand in which there is an enduring connection".  Owning (but not occupying) a residence does not meet the test of a PPOA.

Double Tax Agreements

New Zealand and Hong Kong entered into a Double Tax Agreement [DTA] which came into effect on 1 April 2012. The provisions of a DTA overrule domestic legislation. It is possible that a person may be deemed a tax resident in New Zealand as well as Hong Kong based on respective domestic legislation.

Here the DTA takes precedence. Reference should be made to Article 4 of the DTA which is in effect a tie-breaker test; the effect of which only one country can succeed in attaching a tax residency tag on taxes dealt with under the DTA. Unlike New Zealand (which taxes on a global basis), Hong Kong imposes tax on a territorial basis. Thus income earned outside Hong Kong is not taxed in Hong Kong.

Worldwide Tax

If (unbeknown) one accelerates their New Zealand tax residency (e.g. under the physical presence test) all worldwide income then becomes taxable in New Zealand. Further, whilst Hong Kong has a progressive resident tax rate (similar to New Zealand), various income splitting, exemption and rebates available in Hong Kong make the average Hong Kong tax rate far less than the top marginal tax rate in New Zealand (39%). Thus some planning may be necessary.

Tax Residence and 48-Month Exemption

There is a forty-eight month domestic income tax exemption in respect to foreign sourced income (other than employment or services income) available for overseas individuals who become tax resident. The exemption is not available if the person has been an New Zealand tax resident within the previous 10 years. This is referred to as the transitional residency exemption.

Company Residency

A company is resident if it is incorporated in New Zealand or its head office, centre of management or the place from which directors exercise control is situated in New Zealand.

Trust Residency

The taxation of a trust is determined by the residence of its settlors.

Foreign Sourced Income

Foreign sourced income derived by a New Zealand tax resident is subject to New Zealand tax at the taxpayer's marginal tax rate. Foreign tax paid is available as a credit up to the equivalent New Zealand tax imposed.

Non-resident withholding tax [NRWT] deducted from passive income (interest/dividends/royalties) is generally available in full as a credit. This is provided either by way of the DTA or domestic legislation. Imputation credits attached to foreign dividends are not available as a tax credit.

Foreign Investment Funds and Controlled Foreign Corporations

New Zealand adopts a comprehensive international tax regime under which New Zealand residents are subject to New Zealand tax (in respect to foreign investments) under either the Foreign Investment Fund [FIF] or Controlled Foreign Corporation [CFC] regimes.

Under the CFC regime, foreign sourced income of a foreign company controlled by New Zealand shareholders is attributed back to the New Zealand resident shareholder. However, where a CFC generates active income (as opposed to passive income such as interest), that active income will not be reported for New Zealand taxation purposes; nor attributed to the New Zealand shareholders of the foreign company. Where a New Zealand resident has an interest in a FIF there is a requirement to calculate and return income attributable to that interest. Thus income can be taxed on an unrealised basis (see paragraph 11).

A person has FIF income if inter alia that person has rights in a foreign company, rights under a life insurance policy issued by a non-resident and such rights/entitlement are not otherwise exempted or fall within the CFC regime.

Pensions and Annuities

Pensions and annuity benefits are taxed as received. Certain lump sum withdrawals from foreign superannuation schemes no longer come under the FIF regime. First of all there is a four year window (non-taxable) which applies separately and alongside the transitional residency exemption. Outside of the four year window, the receipt of lump sum payments will be based on the length of residence of the person in New Zealand.


Dividends derived by a New Zealand resident individual from a foreign company (not subject to FIF rules) are subject to New Zealand income tax on the gross dividend. Credit is available for foreign tax paid up to the equivalent New Zealand tax. Reference needs to be made to any double tax agreement for any variation to the above.  Insofar as New Zealand/Hong Kong is concerned, Article 10 deals with dividends.

Fair Dividend Rate Regime

Where an investor owns less than 10% of a foreign company (referred as a portfolio investment), New Zealand has introduced a fair dividend rate [FDR] regime to tax deemed foreign dividends. The FDR has been set at 5% of the market value [MV] in a portfolio investment. Australian listed investments (in general) are excluded from the FDR regime. The FDR is deemed to be the return (including dividend) from the investment in the offshore shares on an annual basis. Assume a taxpayer holds offshore shares with a market value [MV] of NZ$100,000 at 1 April 2022. During the year the taxpayer acquires another NZ$20,000 which is held at 31 March 2023. During the year ended 31 March 2023, the taxpayer receives a dividend of NZ$3,000. Shares have a MV of NZ$121,000 at 31 March 2023.  Under FDR the taxpayer would be taxed on NZ$5,000 (5% of NZ$100,000). However, if a non-corporate taxpayer can show his actual return is less than NZ$5,000, he would be taxed on that lesser amount. In the illustration, the taxpayer has received dividends of NZ$3,000 plus gain of NZ$1,000 to equal NZ$4,000. As a result, tax would be imposed on NZ$4,000 in the 2023 income year. Corporate taxpayers do not have this option under the FDR method.

Capital Gains Tax

Unlike much of the western world, New Zealand does not have a general capital gains tax [CGT].   However, with the intended objective of making more residential homes available to New Zealanders, a tax regime has been introduced to apply an income tax to sales of New Zealand residential rental property [RRP].  RRP acquired after 27 March 2021 will attract tax if sold within ten years of acquisition (this is referred to as the bright-line test). There are certain exemptions, the primary one being one's main home. In addition, to supplement the objective, interest on borrowings to purchase RRP (post 27 March 2021) are now denied as a deduction effective from 1 October 2021. For RRP acquired pre 27 March 2021, interest deductions are to be phased out over a period of five years.

Tax Rates for Individuals and Trusts

Tax rates (effective 31 July 2024) for individuals are:

10.5% Up to NZD 15,600 pa

17.5% From NZD 15,601 to NZD 53,500 pa

30.0% From NZD 53,501 to NZD 78,100 pa

33.0% From NZD 78,101 to NZD 180,000 pa

39.0% Over NZD 180,001

The current tax rate for trusts is: 33.0%

New Zealand does not have a wealth tax, stamp duty or death duties.

Company Tax

New Zealand resident companies and New Zealand subsidiaries of a foreign company are taxed on net income after allowable deductions.

Company tax rate is a flat 28.0%

Non-resident Withholding Tax

Non-resident withholding tax [NRWT] is charged on dividends, interest and royalties remitted from New Zealand to non-residents. The rate is generally 15% (interest/royalties) and 30% (dividends). In respect to countries with which New Zealand has a double tax treaty, NRWT is reduced to 5% or 15% (dividends) and 10% (interest/royalties). NRWT on dividends can be 0% (for over 10% shareholding) or 15% (for less than 10% shareholding) if dividends are fully imputed. NRWT on interest can be substituted with a 2% approved issuer levy [AIL] which is payable by the borrower [the 2% itself is tax deductible].  This is not available where the parties (lender/borrower) are associated.

Portfolio Investment Entity

Investment in a Portfolio Investment Entity [PIE] allows returns to be taxed at a maximum 28%. Some investors will be taxed as low as 10.5%.

An investor, who is not resident in New Zealand, can receive income that has a zero rate of tax attracted. This incentive to attract foreign investment is known as a notified foreign investor [NFI]. An NFI can invest in a Portfolio Investment Entity [PIE] via a zero-rate PIE. 


Migrants/returning expats do need to take professional advice prior to moving to New Zealand. There is increasing cooperation among tax authorities worldwide to ensure taxpayers meet their global tax obligations.

New Zealand Inland Revenue is currently actively conducting reviews to ensure taxpayers have correctly recorded income from foreign investments. In a number of cases, migrants/returning expats have received entitlements (e.g. pension/lump sum payments/dividends/interest), which are not subject to tax in the country of source, but which are liable for tax in New Zealand (unless exempted as a transitional resident).

What if I get it wrong?

Where income has not been declared; or expenses wrongly claimed, New Zealand imposes a costly penalty regime. The resulting additional core tax is then subject to accumulating late payment penalty, accumulating use of money interest and, in some instances, shortfall penalties.

A rule of thumb method is that one can treble the amount of core tax to take into account the combination of penalties referred above. A voluntary declaration (in other words one gets to Inland Revenue before they get to you) will generally reduce the impact of shortfall penalties.

Important Note and Disclaimer

This update (dated 1 January 2023) is provided by Des Trigg CA Tax Consultant of Auckland. The content is for information only and should not be acted upon without specific and proper professional advice. Neither the author, New Zealand Chamber of Commerce in Hong Kong or its members nor any staff member accept any liability to any other party.

Des Trigg CA Tax Consultant

Mobile: +64 21 768 967   Website: www.destrigg.co.nz   Email: des@destrigg.co.nz

1 January 2023

APEC Business Travel Card

A virtual card stored on your mobile device, the APEC Business Travel Card gives accredited business people streamlined entry to participating APEC economies. This occurs through a simple pre-clearance system that allows business people, through a single application, to obtain multiple short-term entry to these economies.

The card means an end to the time consuming need to apply for visas or entry permits and an end to long airport queues on entry.

Participating jurisdictions include: Australia, Brunei, Chile, the People's Republic of China, Hong Kong Special Administrative Region, Indonesia, Japan, Korea, Mexico, Malaysia, New Zealand, Papua New Guinea, Peru, the Philippines, Russia, Singapore, Thailand, Taiwan and Vietnam. The United States and Canada are transitional members of the scheme (limited benefits apply).

Cardholders enjoy

•    pre-cleared entry to participating APEC economies (no need to apply for visas or entry permits)
•    multiple short-term entry to these economies; cards are valid for five years
•    faster immigration processing on arrival
•    entry and exit through special APEC lanes at major airports.

Who’s eligible?

Business people who:

•    are passport holders of participating economies
•    travel regularly to conduct trade and investment activities in those economies
•    have not been convicted of a criminal offence.


An APEC Business Travel Card is normally issued with a validity period of five years. Upon expiry there is no automatic renewal. Holders of APEC cards must reapply afresh for a replacement card. As it takes time for the approvals process, and to ensure uninterrupted use of the APEC card facility, experience suggests holders should apply for a new [replacement] card around six months prior to the expiry of their current card.

Changed passport

If an APEC card holder renews his/her passport during the term of the APEC card, they should contact the issuing APEC card office for reissue of a replacement card bearing the revised passport details. A new card is issued without the need to go through the approvals process.


New Zealand passport holders download the application form here. Application form will open in a new window and in pdf format.This form is issued by the New Zealand Immigration Service.

If you are the holder of a Hong Kong Permanent Identity Card, you may be able to apply for a Hong Kong issued APEC Business Travel Card even though you hold a foreign passport. Details are available from the Hong Kong Immigration Department here.
New Zealand Hong Kong Working Holiday Scheme

Applicants from Hong Kong applying for a working holiday in New Zealand

The New Zealand and Hong Kong Governments operate a reciprocal working holiday scheme designed to allow young persons to experience life in each other's jurisdiction.

There are 400 places per year available under the scheme. The visa is a multiple entry work visa valid for a one year stay in New Zealand and can be used for your first entry for up to a year after issue. You can study in one course of less than three months duration while in New Zealand. You cannot work for the same employer for more than three months.

Who's eligible ?

To obtain a New Zealand Working Holiday Visa you must:

Your application

Applications can only be submitted online.

You can get all the necessary information on how to apply specific to the New Zealand working holiday visa from Hong Kong as well as link to the application site on the webpage of Immigration New Zealand here.

There is a Q&A webpage which answers many common questions relating to working holiday visas.

Directly link here to the application page. You may also check the status of submitted applications at this page.

Important notes

If you have ever been sentenced for any offence, or refused a visa or entry to any country, you must declare them when you apply for your visa. If you fail to declare convictions, previous visa refusals, or arrive with insufficient funds and no return ticket, you will be refused entry to New Zealand on arrival - even if you hold a visa.

Lodging your application

You can apply for a working holiday visa online via the link above.

Finding work while in New Zealand

Many seasonal industries throughout New Zealand seek people with working holiday visas for casual employment. You can find out about work opportunities by visiting the local Department of Work and Income (DWI) service centres found in each region.

How about New Zealanders wanting to work in Hong Kong?

The Hong Kong Government has information available for New Zealand persons seeking to obtain a working holiday visa for Hong Kong.

Visit the Hong Kong Immigration Department website.

Resources : New Zealand