Since 1 April 2006, people arriving to live in New Zealand may qualify for a temporary tax exemption on most types of their foreign income.
This temporary tax exemption is available to people who have arrived in New Zealand on or after 1 April 2006 and are new migrants or returning New Zealanders who have not been resident for tax purposes in New Zealand for at least 10 years prior to their arrival in New Zealand.
The exemption can only be granted once in a lifetime. For further advice on the foreign income tax rules, please feel free to contact the experts.
The temporary tax exemption for foreign income is for four calendar years (up to 49 months). The exemption starts on the first calendar day of the month you arrive in New Zealand and is valid until the last calendar day of that month four years later.
For example, if you were to arrive in New Zealand on 22 April 2011 and have one or more types of foreign income that are temporarily exempt for taxes in New Zealand (see list below), you are eligible for the exemption counting from 1 April 2011 until 30 April 2015, which effectively is 49 months.
The tax exemption is automatically granted if you qualify.
Types of foreign income temporarily exempt from tax in New Zealand:
When your tax exemption ends after four years (up to 49 months), you must declare all foreign income on your annual income tax return (IR3 for individuals).
These types of foreign income are not tax exempt in New Zealand:
If you have any of these types of income, you must declare them on your annual income tax return (IR3 for individuals) from the date of your arrival in New Zealand.
The tax exemption is automatically granted if you qualify. You do not have to contact the New Zealand Inland Revenue Department (IRD) with your information, but if you would like it to, the IRD will confirm your eligibility for the temporary tax exemption based on the following information you provide:
You can contact the IRD in one of four ways:
Send a letter to the processing centre nearest to you.