International Tax

A number of items have been published by the Commissioner on the topic of International Tax. This overview sets out these items, organised by topic.

Tax residence
Foreign investment funds
Foreign tax credits
Foreign residential property
Foreign trusts
International tax determinations
Pensions
Foreign currency
Non-residents - tax obligations
Non-residents - income tax exemptions
Non-resident directors' fees
Goods and Services Tax
Compliance and Administration
Revenue Alerts
Case summaries
Technical decision summaries.

Further information on International Tax is available here. The topics include international tax for individuals and business, double tax agreements, exchange of information and foreign exemption trusts.

The Commissioner issues different types of guidance items to cater for different customer needs. The different types of items are explained here.

Tax residence

Title	Summary	Date issued
Tax residence IS 16/03	This IS sets out the Commissioner's view on tax residence rules for individuals, companies and trusts.	20 Sep 2016
Commissioner’s Operational position on tax residence	The Commissioner's OP on IS 16/03 Tax residence.	22 Sep 2016
GST - definition of a resident IS 21/07	This IS provides guidance on how to determine whether a person is a resident for GST purposes.	23 Sep 2021

Title

Summary

Date issued

Tax residence

IS 16/03

This IS sets out the Commissioner's view on tax residence rules for individuals, companies and trusts.

20 Sep 2016

Commissioner’s Operational position on tax residence

The Commissioner's OP on IS 16/03 Tax residence.

22 Sep 2016

GST - definition of a resident

IS 21/07

This IS provides guidance on how to determine whether a person is a resident for GST purposes.

23 Sep 2021

Foreign investment funds

Title	Summary	Date issued
Foreign investment funds	A foreign investment fund (FIF) is a foreign company, a foreign superannuation scheme or an insurer under a foreign life insurance policy. FIF income must be calculated under one of five methods. The fair dividend rate method is one such method. A person can apply to the Commissioner for a determination that they can use the fair dividend rate method to calculate their FIF income. These determinations are listed here.
Foreign investment fund calculation methods in case of non-compliance QB 23/10	This QWBA explains that a person has a choice of methods to calculate FIF income even if they fail to declare the income in a tax return and later file a voluntary disclosure or fail to file a tax return by the due date and later provide one including the income. It also explains what happens if a person does not file a return and the Commissioner issues a default assessment.	15 Dec 2023

Title

Summary

Date issued

Foreign investment funds

A foreign investment fund (FIF) is a foreign company, a foreign superannuation scheme or an insurer under a foreign life insurance policy. FIF income must be calculated under one of five methods. The fair dividend rate method is one such method. A person can apply to the Commissioner for a determination that they can use the fair dividend rate method to calculate their FIF income.

These determinations are listed here.

Foreign investment fund calculation methods in case of non-compliance

QB 23/10

This QWBA explains that a person has a choice of methods to calculate FIF income even if they fail to declare the income in a tax return and later file a voluntary disclosure or fail to file a tax return by the due date and later provide one including the income. It also explains what happens if a person does not file a return and the Commissioner issues a default assessment.

15 Dec 2023

Foreign tax credits

Title	Summary	Date issued
How to calculate a foreign tax credit IS 21/09	This IS explains how to calculate a foreign tax credit under subpart LJ of the ITA 2007. It also explains how to segment foreign-sourced income by country and by type.	22 Dec 2021
How to claim a foreign tax credit where the foreign tax paid is covered by a Double Tax Agreement IS 16/05 and Fact sheet	This IS (and accompanying Fact sheet) explains how to claim a foreign tax credit when a foreign tax is covered by a Double Tax Agreement.	31 Oct 2016
What is a tax of substantially the same nature as income tax imposed under s BB 1? IS 14/02	This IS explains how to claim a foreign tax credit when a foreign tax is not covered by a Double Tax Agreement.	28 Apr 2014
Australian limited partnerships and foreign tax credits BR Pub 22/01 - 22/05	These five Rulings address the ability of a New Zealand resident partner of an Australian limited partnership to claim foreign tax credits for Australian income tax and dividend withholding tax paid by the partnership on Australian source income. Applies from the first day of the 2022/23 income year to the last day of the 2026/27 income year.	29 Apr 2022
Is a foreign tax credit allowed for state income tax paid in the United States of America? QB 12/13	This QWBA confirms that a foreign tax credit is allowed for state income tax paid on United States-sourced income, if the state income tax is of substantially of the same nature as New Zealand income tax.	2012
Foreign tax credits for amounts withheld from United Kingdom pensions QB 14/12	This QWBA concludes that a person cannot claim a foreign tax credit in New Zealand for any amounts withheld by their United Kingdom pension provider from a United Kingdom pension.	2014
Commissioner’s Operational position on foreign tax credits for amounts withheld from United Kingdom pensions	This OP accompanies QB 14/12 and provides details on how to obtain a refund of amounts incorrectly withheld on United Kingdom pensions.	31 Oct 2014
Netherlands social security pensions - taxation when the recipient is a New Zealand resident BR Pub 07/10	This Ruling clarifies the tax treatment of social security pensions paid by the Netherlands Government to New Zealand tax residents. Applies from 1 Dec 2006.	21 Dec 2007
Investing into a US limited liability company - New Zealand tax consequences BR Pub 23/09 - 23/13	These five Rulings set out the income tax treatment and availability of foreign tax credits or other forms of double taxation relief for New Zealand investors in a United States limited liability company that is taxed on a fiscally transparent basis as a partnership in the United States, but as a foreign company in New Zealand.	24 Jul 2023

Foreign residential property

Title	Summary	Date issued
Tax issues arising from owning foreign residential rental property IS 20/06	This IS explains the different matters you need to consider to comply with your New Zealand tax obligations when you own a foreign residential rental property. Provides general guidance on the New Zealand tax issues that may arise if you are a New Zealand tax resident individual who owns foreign residential property.	3 Jul 2020
Whether a NZ resident needs to pay NRWT on interest paid to an Australian financial institution to purchase an Australian investment property QB 11/01	This QWBA discusses whether NZ residents borrowing money from Australian institutions to purchase Australian investment properties are liable for NRWT on interest.	2011
The financial arrangements rules and foreign currency loans used to finance foreign residential rental property IS 20/07	This IS explains how the Financial Arrangement rules apply to a foreign currency loan used to finance a foreign residential rental property.	3 Jul 2020
Foreign residential rental property amounts – currency conversion FX 20/01	This Approval lets you convert your foreign residential rental property income and expenses using either a monthly or an annual method instead of having to use a daily method.	3 Jul 2020

Foreign trusts

Title	Summary	Date issued
Distributions from foreign trusts IS 19/04	This IS discusses the tax treatment of amounts of money and property received by NZ residents from overseas, including by inheritance, that are potentially distributions from trusts.	19 Dec 2019

Title

Summary

Date issued

Distributions from foreign trusts

IS 19/04

This IS discusses the tax treatment of amounts of money and property received by NZ residents from overseas, including by inheritance, that are potentially distributions from trusts.

19 Dec 2019

International tax determinations

Title	Summary
Controlled foreign companies	Controlled foreign companies (CFC) are companies based overseas but controlled by New Zealand residents. A person will have no attributed CFC income or loss from a CFC if the CFC is a non-attributing active CFC. A person can apply to the Commissioner for a determination that a CFC is a non-attributing active CFC. These determinations are listed here.
Disclosure exemptions	Taxpayers are required to disclose interests in foreign entities. The Commissioner may exempt a person from this requirement if disclosure is not necessary for the administration of the international tax rules in the Income Tax Act 2007. Disclosure exemptions are issued each year and are listed here.
Foreign investment funds	A foreign investment fund (FIF) is a foreign company, a foreign superannuation scheme or an insurer under a foreign life insurance policy. FIF income must be calculated under one of five methods. The fair dividend rate method is one such method. A person can apply to the Commissioner for a determination that they can use the fair dividend rate method to calculate their FIF income. These determinations are listed here.

Title

Summary

Controlled foreign companies

Controlled foreign companies (CFC) are companies based overseas but controlled by New Zealand residents. A person will have no attributed CFC income or loss from a CFC if the CFC is a non-attributing active CFC. A person can apply to the Commissioner for a determination that a CFC is a non-attributing active CFC.

These determinations are listed here.

Disclosure exemptions

Taxpayers are required to disclose interests in foreign entities. The Commissioner may exempt a person from this requirement if disclosure is not necessary for the administration of the international tax rules in the Income Tax Act 2007.

Disclosure exemptions are issued each year and are listed here.

Foreign investment funds

A foreign investment fund (FIF) is a foreign company, a foreign superannuation scheme or an insurer under a foreign life insurance policy. FIF income must be calculated under one of five methods. The fair dividend rate method is one such method. A person can apply to the Commissioner for a determination that they can use the fair dividend rate method to calculate their FIF income.

These determinations are listed here.

Pensions

Title	Summary	Date issued
Foreign tax credits for amounts withheld from United Kingdom pensions QB 14/12	This QWBA concludes that a person cannot claim a foreign tax credit in New Zealand for any amounts withheld by their United Kingdom pension provider from a United Kingdom pension.	2014
Commissioner’s Operational position on foreign tax credits for amounts withheld from United Kingdom pensions	This OP accompanies QB 14/12 and provides details on how to obtain a refund of amounts incorrectly withheld on United Kingdom pensions.	31 Oct 2014
Netherlands social security pensions - taxation when the recipient is a New Zealand resident BR Pub 07/10	This Ruling clarifies the income tax treatment of social security pensions paid by the Netherlands Government to New Zealand tax residents. Applies from 1 Dec 2006.	21 Dec 2007
Monthly retirement payments from the United Nations Joint Staff Pension Fund QB 21/01	This QWBA discusses the income tax treatment of monthly retirement benefits received by New Zealand tax residents from the United Nations Joint Staff Pension Fund (UNJSPF).	21 Jan 2021

Foreign currency

Title	Summary	Date issued
Foreign exchange rates FX 21/01	This Approval approves foreign exchange rate sources that may be used by any person who is required to convert a foreign currency amount into New Zealand Dollars (NZD) for the purpose of determining their tax liability.	21 Dec 2021
Approval - income tax - currency conversion for branches	This Determination covers foreign currency conversion methods approved for branches.	2015
Foreign currency rates DET G9A	This Determination sets out a method for calculating the income or expenditure in respect of a financial arrangement where any rights and obligations of the parties are expressed in a “base currency” other than New Zealand dollars.	4 Dec 1989
Forward Contracts for Foreign Exchange and Commodities DET G14	This Determination provides a method of accruing for taxation purposes the income or expenditure under a forward contract where section 64C(4) cannot be applied, or where the person chooses not to apply section 64C(4).	4 May 1989
Forward contracts for foreign exchange and commodities: an expected value approach DET G14B	This Determination describes when and how a forward contract would work in a specified income year.	3 Jun 2004
Discounted Value of Amounts Payable in Relation to Trade Credits Denominated in a Foreign Currency DET G20	This Determination provides the method to be used to calculate the core acquisition price for a trade credit under the Income Tax Act 1976.	9 Feb 1990
Agreements for Sale and Purchase of Property Denominated in Foreign Currency: Discounted Value of Amounts Payable DET G21A	This Determination prescribes the method for determining the discounted value, in foreign currency, of amounts payable for the property.	27 Sep 1996
Supplies paid for in foreign currency - GST treatment BR Pub 04/01	This Ruling discusses the GST treatment of supplies paid for in foreign currency. Applies from 1 March 2004.	10 Mar 2004

Non-residents - Tax obligations

Title	Summary	Date issued
GST - Registration of non-residents under section 54B IS 21/03	This IS provides guidance on when a non-resident is eligible to register under s 54B.	28 May 2021
Non-resident employers’ obligations to deduct PAYE, FBT and ESCT in cross-border employment situations OS 21/04	This OS provides guidance on a non-resident employers’ obligations to deduct PAYE, FBT and ESCT in certain cross-border employment situations.	1 Dec 2021
Non-resident contractor schedular payments IS 10/04	This IS covers aspects of schedular payments to non-resident contractors.	30 Jun 2010
Non-resident software suppliers' payments derived from New Zealand - income tax treatment IG0007	This Interpretation guideline deals with the income tax treatment, under New Zealand domestic law and double tax agreements, of payments derived from New Zealand by non-resident suppliers of computer software.	14 Oct 2003

Non-residents - Income tax exemptions

Title	Summary	Date issued
Exempt income of non-resident entertainers IS 19/03	This IS considers when the income tax exemption in s CW 20 of the ITA 2007 applies to non-resident entertainers and sportspersons.	14 Jun 2019
Amateur sports promoter exemption - application to non-residents IS0018	This IS explains when a non-resident can qualify for the amateur sports promoter income tax exemption in s CB 4(1)(h) of the ITA 1994.	1 Aug 1998

Title

Summary

Date issued

Exempt income of non-resident entertainers

IS 19/03

This IS considers when the income tax exemption in s CW 20 of the ITA 2007 applies to non-resident entertainers and sportspersons.

14 Jun 2019

Amateur sports promoter exemption - application to non-residents

IS0018

This IS explains when a non-resident can qualify for the amateur sports promoter income tax exemption in s CB 4(1)(h) of the ITA 1994.

1 Aug 1998

Non-resident Directors' fees

Title	Summary	Date issued
Application of schedular payment rules to non-resident directors' fees IS 19/01	This IS considers when tax must be withheld from directors’ fees paid to non-residents and discusses when directors’ fees paid to non-residents are considered to have a New Zealand source.	28 Feb 2019
Operational position on IS 19/01 How schedular payment rules apply to non-resident directors’ fees	This OP reviews how schedular payment rules apply to non-resident directors' fees	28 Feb 2019

Title

Summary

Date issued

Application of schedular payment rules to non-resident directors' fees

IS 19/01

This IS considers when tax must be withheld from directors’ fees paid to non-residents and discusses when directors’ fees paid to non-residents are considered to have a New Zealand source.

28 Feb 2019

Operational position on IS 19/01 How schedular payment rules apply to non-resident directors’ fees

This OP reviews how schedular payment rules apply to non-resident directors' fees

28 Feb 2019

Goods and Services Tax

Title	Summary	Date issued
GST - legal services provided to non-residents relating to transactions involving land in New Zealand BR Pub 15/03	This Ruling covers legal services provided to non-residents relating to NZ land transactions. This Ruling applies from 24 May 2015.	4 Mar 2015
GST- Advertising space and advertising time supplied to non-residents BR Pub 03/03	This Ruling discusses the GST treatment of advertising space and advertising time supplied to non-residents. Applies from 10 Oct 2000.	28 Apr 2003
GST treatment of services provided in making videos and films in New Zealand under contracts with non-residents QB 2007	This QWBA considers the GST treatment of services provided in making videos and films in NZ under contracts with non-residents.	2007
GST - definition of a resident IS 21/07	This IS provides guidance on how to determine whether a person is a resident for GST purposes.	3 Sep 2021

Compliance and Administration

Title	Summary	Date issued
NRWT for dividends paid to companies: Administering the new holding period tests in Article 10 of the NZ/Australia DTA (and in agreements with other countries) CS 20/03	This Commissioner’s statement discusses the correct rate of NRWT that must be withheld from a dividend paid to a corporate payee under the holding period test changes for tax treaties following the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting.	8 Jun 2020
Are tax sparing disclosures still required? QB 2010	This QWBA confirms that taxpayers claiming a foreign tax credit relating to a tax sparing arrangement under a DTA must file a Tax Sparing Disclosure return.	2010
Application for a private ruling or product ruling on an issue dealt with in a mutual agreement made under a Double Tax Agreement - Tax Administration Act 1994, sections 91E(4)(D)(ii) and 91F(4)(D) QB 08/03	This QWBA describes the procedure followed by the CIR where an application for a binding ruling is made for an issue involving a double tax agreement.	2008

Title

Summary

Date issued

NRWT for dividends paid to companies: Administering the new holding period tests in Article 10 of the NZ/Australia DTA (and in agreements with other countries)

CS 20/03

This Commissioner’s statement discusses the correct rate of NRWT that must be withheld from a dividend paid to a corporate payee under the holding period test changes for tax treaties following the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting.

8 Jun 2020

Are tax sparing disclosures still required?

QB 2010

This QWBA confirms that taxpayers claiming a foreign tax credit relating to a tax sparing arrangement under a DTA must file a Tax Sparing Disclosure return.

2010

Application for a private ruling or product ruling on an issue dealt with in a mutual agreement made under a Double Tax Agreement - Tax Administration Act 1994, sections 91E(4)(D)(ii) and 91F(4)(D)

QB 08/03

This QWBA describes the procedure followed by the CIR where an application for a binding ruling is made for an issue involving a double tax agreement.

2008

Revenue Alerts

Title	Summary	Date issued
RA 11/03 Revenue Alert	This RA considers NZ tax residents accessing income held in an offshore bank account using an offshore credit or debit card.	10 Oct 2011
RA 08/02 Revenue Alert	IR and overseas tax authorities are investigating tax haven structures in Liechtenstein used by NZ residents to avoid or evade New Zealand tax obligations.	7 May 2008

Case summaries

Title	Summary	Date issued
Determination of tax residency TRA Case summary 2011	Whether the taxpayer was a resident of New Zealand or Fiji under Art 4 of the Double Taxation Relief (Fiji) Order 1977.	30 Sep 2011
Residency: Interpretation of permanent place of abode - CIR v Diamond Court of Appeal Case summary 2015	Whether an overseas contractor had a permanent place of abode in New Zealand.	18 Dec 2015
Residency: Interpretation of permanent place of abode - Van Uden v CIR Court of Appeal Case summary 2018	Whether a ship's captain had a permanent place of abode in New Zealand.	8 Nov 2018
Entitlement to tax sparing credits under the double tax agreement between New Zealand and China Case summary 2018	Whether a further tax credit should have been allowed for New Zealand tax payable.	8 Mar 2018
Application for discovery of material exchanged pursuant to a Double Taxation Agreement Case summary 2016	Whether there was a basis for the making of an order for discovery.	16 Dec 2016
Commissioner not required to disclose documents exchanged under Double Taxation Agreement Case summary 2016	Whether the Commissioner was required to disclose the documents exchanged.	9 Jun 2016
Double Tax Agreement on pensions not discriminatory Case summary 2010	Whether there was possible discrimination on jurisdictional grounds.	26 Apr 2010

Technical decision summaries

Title	Summary	Date issued
Income tax, controlled foreign company, double tax agreement, shortfall penalties TDS 22/07	Whether there was attributed CFC income; NZ's taxing rights under the Double Taxation Agreement.	1 Jun 2022
Non-resident supplier – application for GST registration TDS 22/16	This dispute considers a non-resident application for GST registration and associated issues.	3 Aug 2022
Permanent establishment TDS 24/11	This TDS concerns the use of a New Zealand subsidiary to provide services to an overseas parent company and whether the overseas parent company had a permanent establishment in New Zealand	29 May 2024

Title

Summary

Date issued

Income tax, controlled foreign company, double tax agreement, shortfall penalties

TDS 22/07

Whether there was attributed CFC income; NZ's taxing rights under the Double Taxation Agreement.

1 Jun 2022

Non-resident supplier – application for GST registration

TDS 22/16

This dispute considers a non-resident application for GST registration and associated issues.

3 Aug 2022

Permanent establishment

TDS 24/11

This TDS concerns the use of a New Zealand subsidiary to provide services to an overseas parent company and whether the overseas parent company had a permanent establishment in New Zealand

29 May 2024