← Guides / New Zealand

Foreign Income Guide — Tax on Overseas Income for NZ Residents

the taxation of the foreign income for the New Zealand residents. The guide covers the taxation of the foreign employment income, the foreign business income, the foreign investment income, and the foreign superannuation (the "foreign pension").

Foreign Income Taxation

The New Zealand residents are taxed on the worldwide income (the "global income"). The foreign income includes: (a) the foreign employment income — the overseas salary and the wages (the "foreign employment" — may be exempt if the "185-day rule" applies), (b) the foreign business income — the overseas business profits (the "foreign PE" — the "permanent establishment" rules), (c) the foreign investment income — the overseas dividends, the interest, the rents (subject to the FIF rules if the total cost exceeds $50,000), and (d) the foreign pensions — the overseas government and the private pensions (the "foreign superannuation" subject to the special transitional rules).

Double Tax Relief

New Zealand has the comprehensive Double Tax Agreements (DTAs) with the 40+ countries. The foreign tax paid on the foreign income can be claimed as the foreign tax credit (FTC) in the NZ tax return to eliminate the double taxation. The FTC is limited to the NZ tax payable on the foreign income. The taxpayer must file the IR3 return with the foreign income schedule showing the foreign tax paid. The foreign exchange gains and the losses on the foreign currency transactions may also be subject to the tax. See our Tax Treaties Guide → for the DTA details.