ABA are Specialists in Overseas Income Tax in NZ
Moving Overseas? Living Overseas? Need Tax Advice?
Tax Residency and Overseas Income can be a complex tax area. There are many rules and regulations, as well as double tax agreements with some countries. Whether you’re offshore for work, lifestyle, or adventure – understanding how your overseas income is taxed in NZ is essential.
ABA Chartered Accountants are specialists in overseas income tax in NZ.
We provide clear, personalised advice on how foreign income and tax residency rules apply to your situation.
We get many enquiries relating to tax residency and overseas income and no two are alike.
Some enquiries can be answered very simply, and others end up becoming complex tax issues that require specialist tax advice to resolve.
Get in Touch – We’ll help you stay compliant, avoid double taxation, and make the most of available reliefs.
Tax on Overseas Income NZ
If you’re a New Zealand tax resident, you’re generally required to declare worldwide income on your NZ tax return. This includes:
- Salary or wages earned overseas
- Rental income from properties you own overseas
- Interest earned from overseas bank accounts
- Interest you earn from money invested overseas
- Superannuation or pensions from another country
In New Zealand, a person’s liability for tax on overseas income in NZ depends on your residency status and any double tax agreements between New Zealand and the source country.
What is a Double Tax Agreement?
Double tax agreements are designed to prevent double taxation, allowing foreign tax credits to offset your NZ tax liability.
New Zealand has a double tax agreement with a number of countries.
These tax agreements cover which country can tax which income source and at what rate.
They also have tiebreaker tests for determining tax residency in dual residency situations.
Understanding Overseas Income and Your Tax Obligations
It’s important to correctly categorise and declare your income from overseas, especially if you’re:
- Working overseas while maintaining ties to NZ
- Earning overseas investment income
- Receiving superannuation or pension payments from another country
Incorrect reporting can result in penalties or backdated tax. ABA can assist with:
- Income classification
- Currency conversion compliance
- Double tax relief applications
- Overseas tax return reviews
Filing Tax Returns for Overseas Income
If you receive income from overseas during the year, you are generally required to file an Individual Income Tax Return (IR3) with Inland Revenue at the end of the financial year. This applies even if you arrived in New Zealand partway through the year or spent time living abroad.
As part of your return, you must complete an Overseas Income Summary (IR1261), detailing the types of foreign income earned and any overseas tax paid. These amounts must be converted to New Zealand dollars and reported correctly to ensure IRD can assess whether any foreign tax credits are available.
If you were a New Zealand tax resident for only part of the year, you’ll need to separate your income into the period you were a resident and the period you were not. This ensures that income is taxed according to your correct residency status.
Key dates and filing requirements:
- The New Zealand tax year runs from 1 April to 31 March.
- Returns are generally due by 7 July, unless you work with a tax agent who has an extension of time.
Not sure how your foreign income is taxed or which forms apply to your situation? Contact ABA, we can assist you.
NZ Tax Residency and Foreign Tax Information
Your tax residency status determines whether you need to file an NZ tax return and pay tax on overseas income. If you’re unsure whether you’re still a resident for tax purposes, or you’re transitioning in or out of NZ, get in touch and we’ll assist you to determine this.
We can assist with:
- Foreign Investment Fund (FIF) income
- New Zealand controlled foreign companies
- Undeclared foreign income
- Foreign trusts
NZ Tax Residency Rules
How does Tax Residency and Overseas Income work in NZ?
In New Zealand, a person’s liability for income tax depends on that person’s residency status. The concept of tax residency is based mainly on the “permanent place of abode” test or on a test involving the days present in New Zealand.
If you are a new resident to New Zealand, based on these tests you may need to complete a New Zealand Income Tax Return.
What are the rules for working out your tax residency based on?
Permanent place of abode test:
- A person is deemed to be a New Zealand resident if that person has a permanent place of abode in New Zealand, whether or not that person also has a permanent place of abode overseas.
Day Count Test:
- You are deemed a tax resident in New Zealand if you are present in New Zealand for more than 183 days aggregate in any 12-month period.
- To lose your tax residency, you need to be absent from New Zealand for more than 325 days in any 12-month period.
Leaving the country does not automatically make you a non-resident for tax purposes. We can help clarify your position and manage transitional residency concessions if applicable.
NZ Tax Resident Working Overseas
If you’re working overseas but remain a New Zealand tax resident, you’re required to:
- Report all foreign-sourced income
- Claim any allowable foreign tax credits
- Disclose overseas bank accounts, pensions or trusts (if applicable)
Our team specialises in overseas tax advice for expats and Kiwis abroad. We work closely with you to manage NZ compliance while optimising tax efficiency across borders.
Yacht Crew Tax Specialist
If you’re part of the superyacht crew or working on international vessels, you may assume you’re exempt from NZ tax – but that’s not always the case.
ABA are yacht crew tax specialists, helping seafarers understand their tax obligations.
We offer practical advice on tax residency, foreign income reporting, and student loan repayments for yachties.
Contact ABA for advice on your specific situation.
Overseas Rental Tax Returns NZ
Do you own rental property overseas? If you’re an NZ tax resident, you must include this income in your tax return.
ABA provides full support for:
- Overseas rental tax returns (NZ)
- Deductible expenses and depreciation schedules
- Exchange rate conversion compliance
- Foreign tax credit claims
Contact us for assistance with your overseas rental property tax returns.
FAQ: Tax Residency and Overseas Income NZ
What is tax residency?
Tax residency determines whether you’re taxed on worldwide income in NZ or only on income sourced within NZ. It’s based on your presence in NZ and the concept of a permanent place of abode.
Were you a non-resident for tax purposes?
You may be a non-resident if you’ve been out of NZ for more than 325 days in a 12-month period and have no enduring ties to NZ – But this needs to be assessed carefully.
What is the tax on student loans when overseas (NZ)?
If you’re living overseas and have a NZ student loan, you’re generally required to make fixed repayments. Late or non-payment incurs interest and penalties. ABA can help manage your obligations.
Can I claim tax back on overseas donations (NZ)?
Only donations made to approved NZ charities are eligible for tax credits. Donations to overseas organisations generally don’t qualify.
Do I pay tax on money transferred from overseas?
Not necessarily. It depends on the source of the funds. Gifts and inheritances may not be taxable, but foreign income is. ABA can advise based on your situation.
How are overseas bonds taxed in NZ?
Foreign bonds may be subject to NZ’s Foreign Investment Fund (FIF) rules. These rules can be complex and depend on the value and nature of your investments.
Am I a tax resident of NZ?
If you’ve spent 183+ days in NZ in a 12-month period, or have a home or family here, you may be a tax resident. ABA can review your case to confirm.
Need Help with Your Overseas Income?
At ABA, our experienced team of accountants, who specialise in overseas income, can help you stay compliant, minimise tax, and avoid surprises. Whether you’re moving overseas, working abroad, or earning income from multiple countries, we’re here to help.
Schedule a meeting today and get expert overseas tax advice from NZ-based specialists.
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