If you are a New Zealand tax resident, you are taxed on your worldwide income — including income earned overseas. Whether you work abroad temporarily, receive foreign investment income, or have recently arrived in NZ, understanding your obligations helps you avoid surprises at tax time.
NZ tax residents must declare all worldwide income — including overseas salary, rent, interest, and dividends. You can claim a foreign tax credit for tax paid overseas to avoid double taxation. New migrants get a 4-year transitional resident exemption on most foreign income (not employment income from NZ). Declare overseas income in your IR3. NZ has double tax agreements with 40+ countries including Australia, UK, USA, and China.
Are You a NZ Tax Resident?
NZ taxes residents on worldwide income. You are a NZ tax resident if:
- You have a permanent place of abode in NZ (home, family ties, assets), OR
- You have been present in NZ for more than 183 days in any 12-month period
You can be a tax resident of NZ and another country simultaneously — this is where double tax agreements (DTAs) matter.
Becoming a non-resident: If you leave NZ and your permanent home is no longer in NZ, you may become a non-resident. Non-residents are only taxed on NZ-sourced income (NZ wages, NZ rental income, NZ interest). Get advice from an accountant before assuming you are a non-resident.
What Overseas Income Is Taxable in NZ?
As a NZ tax resident, you must declare:
| Income type | Notes |
|---|---|
| Overseas salary and wages | Employment income earned while overseas |
| Overseas rental income | Rent from properties owned outside NZ |
| Overseas interest | Interest from overseas bank accounts |
| Overseas dividends | Dividends from foreign shares |
| Overseas business income | Income from overseas businesses |
| Foreign trust distributions | Distributions from overseas trusts |
| Pension income from overseas | Including Australian superannuation withdrawals |
The 4-Year Transitional Resident Exemption
New migrants and returning NZ residents who have not been tax resident for 10+ years may qualify for the transitional resident exemption:
- Valid for 4 years from becoming a NZ tax resident
- Exempts most foreign-sourced income (interest, dividends, rent from overseas) from NZ tax
- Does not exempt overseas employment income — that is always taxable in NZ
- Does not exempt NZ-sourced income
This exemption is significant for people bringing overseas investment portfolios to NZ. During the 4-year window, overseas investment income is not subject to NZ tax.
To claim: include your transitional resident status on your IR3. IRD may ask for evidence of your previous non-residency.
Foreign Tax Credits
If you paid tax overseas on income that is also taxable in NZ, you can claim a foreign tax credit to reduce double taxation:
- Credit is the lesser of: the tax paid overseas, or the NZ tax on that income
- Prevents double taxation but does not create a net refund below $0
Example:
- Overseas salary: $50,000 AUD (~$55,000 NZD)
- Australian tax paid: AUD $10,000 (~NZD $11,000)
- NZ tax on $55,000 at marginal rates: ~$9,800
- Foreign tax credit: $9,800 (NZ tax, being the lesser amount)
- Additional NZ tax to pay: $0
If the overseas tax rate is higher than NZ’s equivalent rate, you pay no additional NZ tax (but do not receive a refund of the overseas excess).
Double Tax Agreements (DTAs)
NZ has double tax agreements with 40+ countries that determine which country has the primary right to tax income:
| Country | DTA exists? |
|---|---|
| Australia | Yes |
| United Kingdom | Yes |
| United States | Yes |
| China | Yes |
| Japan | Yes |
| Canada | Yes |
| Germany | Yes |
| Singapore | Yes |
| India | Yes |
DTAs typically reduce withholding tax rates on dividends and interest paid between the two countries, and allocate taxing rights to prevent double taxation. The specific rules depend on the DTA with each country — check ird.govt.nz/international for full treaty details.
Overseas Employment Income
If you are a NZ tax resident temporarily working overseas:
- Your overseas employment income is taxable in NZ
- Declare it in your IR3 under overseas income
- Claim a foreign tax credit for any tax paid in the overseas country
- If you were paid in a foreign currency, convert to NZD using the IRD’s approved exchange rates (published on ird.govt.nz)
Australian Superannuation
Many NZ residents have Australian superannuation from working in Australia:
- While growing (pre-withdrawal): Australian super in accumulation phase is generally not taxable in NZ under the trans-Tasman super portability rules
- On withdrawal: When you withdraw Australian super and bring it to NZ, it may be taxable in NZ — seek advice before withdrawing
You can transfer some Australian super balances to KiwiSaver — IRD and Kāinga Ora have specific rules for this.
Frequently Asked Questions
I worked in Australia for 6 months. Do I need to declare the income in NZ?
Yes, if you remained a NZ tax resident during that time (e.g., you kept your NZ home). Declare the Australian income on your NZ IR3 and claim a foreign tax credit for Australian PAYG tax withheld. The trans-Tasman DTA ensures you are not fully double-taxed.
I received dividends from US shares. What tax applies?
The US withholds 15% withholding tax on dividends under the NZ-US DTA. You declare the gross dividend as income in NZ, and claim the 15% US withholding as a foreign tax credit. Any additional NZ tax (at your marginal rate above 15%) is payable. Additionally, if you hold significant US shares, the FIF rules may apply.
I moved to NZ 2 years ago. Am I eligible for the transitional resident exemption?
If you had not been a NZ tax resident for the 10 years before arriving, yes — you are eligible for a 4-year exemption on foreign-sourced passive income. You should have elected this when you first became resident. If you did not, contact an accountant — there may be options.