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Moving to New Zealand Guide — Tax Residency, Transitional Residency, and Tax Rules

the tax rules for the individuals moving to New Zealand. The guide covers the tax residency rules, the transitional residency exemption (the "48-month exemption" for the foreign-sourced income), the banking and the KiwiSaver registration, and the initial tax compliance.

Tax Residency on Arrival

The individuals moving to New Zealand become the tax residents when: (a) they are present in NZ for 183 days or more in any 12-month period (the "183-day test"), or (b) they have the permanent place of abode in NZ (the "permanent place of abode test" — the property ownership, the family ties, the social connections). The residency starts from the first day of the period that triggers the residency (the "date of the arrival" for the permanent place of abode test or the date of the 183rd day for the 183-day test).

Transitional Residency Exemption

The transitional residency exemption applies to the new NZ residents who have not been the NZ resident in the past 10 years. The exemption provides the tax-free treatment of the foreign-sourced income (the "foreign income" — the foreign pensions, the foreign employment income, the foreign investment income) for the period of 48 months (4 years) from the date of the arrival. The NZ-sourced income (the NZ employment, the NZ business, the NZ rental) is taxable from the day 1. The exemption applies automatically — the new resident does not need to file the separate application. The KiwiSaver enrolment is available to the new NZ residents who are the NZ citizens or the permanent residents.