Kiwi’s love to travel. Sometimes for a short time and sometimes a bit longer. When that holiday turns into a longer stay tax residence comes into play.
Tax residence is a key concept for Income Tax, GST and Student Loans. It determines if you need to pay tax on worldwide income in New Zealand or just income earned in New Zealand. It can result in GST being returned and can involve student loan repayments and interest. It is therefore an important part in understanding your tax obligations both when coming to New Zealand or leaving.
The results can be significant and have resulted in several Court cases over the years. This has lead to IRD publishing guidance on how it sees this working. The last guidance was issued back in 2016 and IRD have just published a draft of the next update. The draft guidance covers:
- Individuals
- Companies
- Trusts
It also now includes student loans
These guidance statements are always a helpful first place to look when considering residence so this will be a welcome update. This will be particularly relevant coming up to Christmas as the new year can often bring about a change of scenery for some.