Just a quick update, for US citizens/residents wondering about working as a self-employed contractor in NZ:
My partner (who is a US permanent resident) has had a few part-time jobs here in NZ since I last posted. Each time she gets a new job, she asks if she can be an employee (with PAYE withheld). Some places say yes, others say no, which means they have to pay her as a self-employed contractor.
For each "self-employed" job (where no PAYE is withheld), she has to pay the normal NZ income tax,
PLUS the US self-employment tax on top. Since all her work is in NZ, she has no overseas income, and so cannot claim the US self-employment tax an overseas tax credit. (The IRD confirmed that you cannot declare an overseas tax credit without overseas income). So, she is stuck paying that horrible US self-employment tax. There is, as far as I know, no way around it (short of renouncing US residency or citizenship).
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It would be nice if there were a "proxy" company in NZ which offered to act as an employer for tax purposes. So, if someone insists on paying you as a contractor, you would have your income go to the proxy company instead of yourself, and the proxy company would withhold PAYE and ACC (and potentially KiwiSaver) for you. So, technically you would be "employed" and therefore exempt from the US self-employment tax.
Do such companies exist? Would they be considered "dodgy" or perfectly legit, in the IRD's eyes? Or does it all matter how many of the employee-vs-contractor boxes they can tick on this page:
http://www.ird.govt.nz/payroll-emplo...ontractor.html