Tax for PR Working Abroad

[kalisultana]

I am hoping someone could assist me. I worked abroad (Asia) on a contract for a few months and didn't have to pay taxes there as it was a short stint. However, I want to know regarding tax rules in New Zealand - am I obligated to pay local taxes here for work done abroad? How much is due (17% or less/more)? Any additional info I should know about?

I was fully employed in New Zealand until November 2012 and got my last paycheck on December 2012. I began working abroad in December 2012.

Thanks for your help.

[lucky]

With the information shared in your post I'd ask you to read this.

"Double tax agreements
You may be a tax resident in both New Zealand and another country or territory. This means that you are a resident in two countries or territories and subject to the tax laws of each.

If both countries or territories tax their residents on worldwide income you could be taxed twice on the same income. Double tax agreements (DTAs) have been negotiated between New Zealand and many other countries or territories to decide which country or territory has the first or sole right to tax specific types of income."
Source: http://www.ird.govt.nz/income-tax-in...nz/double-tax/

[kalisultana]

Thanks, Lucky! :-)

[kalisultana]

I work on a contract basis so I might actually be living in NZ for less than 183 days. I'm not a resident of the other countries where I work on a contract basis but they all have DTAs with NZ.

[lucky]

Here is one more and seems more relevant.

"What overseas income will you be taxed on

If you are a resident of New Zealand for tax purposes, you will be taxed in New Zealand on all of your "worldwide income". This is income derived from New Zealand as well as income derived from all other countries

Source: http://www.ird.govt.nz/international/nzwithos/income/"

[KristinaAnderse]

Hi Kalisultana. On the basis of time you are probably still a tax resident of New Zealand. Even if you had passed the time test if you have retained ties to the country you could potentially remain a tax resident indefinitely. As a tax resident NZ will tax you on your worldwide income and you may have to pay tax in New Zealand on your overseas earnings. Any tax treaty may alter the situation however.

[chrisl34]

I am hoping someone could assist me. I worked abroad (Asia) on a contract for a few months and didn't have to pay taxes there as it was a short stint. However, I want to know regarding tax rules in New Zealand - am I obligated to pay local taxes here for work done abroad? How much is due (17% or less/more)? Any additional info I should know about?

I was fully employed in New Zealand until November 2012 and got my last paycheck on December 2012. I began working abroad in December 2012.

Thanks for your help.

Whether or not you are liable for NZ tax depends on whether you are a NZ tax resident or a non-resident. If you are a NZ tax resident, you will be liable for NZ tax on the contract income earned offshore (unless you are working in a country with which NZ has a Double Tax Agreement and that Agreement applies to change this). The NZ tax will be payable at the normal marginal rates in NZ ( up to 33%: see http://www.ird.govt.nz/how-to/taxrat...etaxrates.html)

However, if you end up working overseas for an extended period of time (on various contracts overseas), it is possible that you may become a non-resident of NZ (depending on what other ties you retain to NZ). For example, if you worked overseas for the next 3-4 years, returned intermittently to NZ for short periods, did not have a dwelling available to you here on short notice and your other ties to NZ were minimal, then it is probable that you would become a non-resident of NZ for income tax purposes. This non-residence could in fact go right back to the day after the day you left NZ to start your first contract.

If there is a reasonable amount of tax at stake, you should consider taking professional advice

[kalisultana]

Thanks so much for your help. I'll definitely look into the DTA and will chat with someone to ensure I pay the right tax. Cheers. :-)

[jawnbc]

Just got nailed on this for my Canadian taxes. We've not sold our apartment in Vancouver yet and my husband doesn't arrive until the end of this month. So I'm liable for the differential on my NZ income, since Canadian rates are higher. CRAP!

[chrisl34]

Just got nailed on this for my Canadian taxes. We've not sold our apartment in Vancouver yet and my husband doesn't arrive until the end of this month. So I'm liable for the differential on my NZ income, since Canadian rates are higher. CRAP!

The good news is that your tax exemption period in NZ may be longer than 48 months. It should probably run from the day you arrived here until 48 months from when your husband joins you.