New Migrant Tax Holiday Reminder

New migrants to New Zealand may be able to benefit from a “Tax Holiday” on foreign sourced income for a period of up to four years after they first become a tax resident in New Zealand.  This also applies to New Zealanders returning from overseas, who have been absent for 10 years or more.

A person becomes a tax resident in New Zealand when they have been personally present in New Zealand for an aggregate of 183 days in any 12 month rolling period.  The start date for the ‘183 day test’ is the first day you arrive in New Zealand.

Migrants should be aware that a visit to New Zealand prior to them making a permanent move may prematurely trigger the 183 day rule.  For example, a visit to attend a job interview or research housing market could in fact be the first of the 183 days. 

Whether you are planning your migration or are already residing in New Zealand it is strongly advised that you seek professional tax advice from a suitably qualified and NZ experienced accountant or tax advisor.

Personal tax cuts

The New Zealand Government has passed legislation to implement its pre-election policy in respect of personal tax cuts. However, the Government has since signalled that further personal tax cuts are unlikely. 

There are benefits for everyone across the salary spectrum for example:

For someone on the average wage of $44,000, the saving will be around $30 per week from 1 April 2009, while someone earning $100,000 will be around $50 per week better off initially.

These tax scales are also supplemented by the new Independent Earner Tax Credit of $10 per week for those earning $24,000 to $44,000 per annum who do not receive benefits, family assistance or New Zealand superannuation.

For information about the new tax scales please click here. 

Information courtesy of John Adams at KPMG Hamilton, phone 647 858 6541 or email jadams1@kpmg.co.nz