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Tax issues for overseas incomes

Tax issues for overseas incomes

Old Mar 14th 2008, 2:18 am
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Default Tax issues for overseas incomes

Hi, since arriving to Auckland I've struggled to get a job working in Oracle e-business, to this I approached my previous employer based in Europe and wants me to help them out during a busy period for the next 10 weeks. They're going to pay me in Euro or GBP.

Is anyone in NZ doing a similar thing or earning money overseas. What's the best most "tax efficient" way of bringing the money to NZ. Or due to the strong NZD if I leave my money in UK do I need to pay the tax there??

HELP!!!
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Old Mar 14th 2008, 3:25 am
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Default Re: Tax issues for overseas incomes

Originally Posted by mistran View Post
Hi, since arriving to Auckland I've struggled to get a job working in Oracle e-business, to this I approached my previous employer based in Europe and wants me to help them out during a busy period for the next 10 weeks. They're going to pay me in Euro or GBP.

Is anyone in NZ doing a similar thing or earning money overseas. What's the best most "tax efficient" way of bringing the money to NZ. Or due to the strong NZD if I leave my money in UK do I need to pay the tax there??

HELP!!!
Hi, I work part time for my former UK based employer, they got me tax exemption from the UK, send my money straight into the bank over here in NZ Dollars & then I pay the tax over here
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Old Mar 14th 2008, 8:30 am
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Default Re: Tax issues for overseas incomes

You have to start with whether or not you are a New Zealand tax resident. A NZ tax resident is someone who has been in NZ for 183 days in the last 12 months. Part days count as hole days. You will also have a permanent place of abode. I won't describe the full definition, but will refer you to the IRD website which has a very good description on their policy.

If you are a NZ tax resident, you are taxed on your world wide income. However, if you arrived in NZ after 1 April 2006, you will be a transitional taxpayer and not liable for tax on your foriegn sourced income for 48 months from your arrival.

Where will you be performing the work? If you perform the work in New Zealand, it will be taxable. If you perform the work overseas, I think that it may count as foreign sourced income and may not be subject to tax in NZ. If you have received a confirmation that you a non resident of the UK, your employer there may only have to deduct a non resident tax on your income.

I appreciate that you were likely looking for a more direct answer, however, you can see that more information is needed to fully answer your question. Depending on the amount and what you are going to do with it, it could be worth a quick visit to the local Ernst and Young office or other firm offering tax services. I would suggest that the ansswer could be provided for less than $500 once your particular facts are described, researched and tha answer communicated to you.

If you want, send me your contact details and I wlll be glad to provide you a reference to someone in Christchurch that can handle your questions over email.
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Old Mar 14th 2008, 1:35 pm
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Default Re: Tax issues for overseas incomes

Originally Posted by mickey_d View Post
Hi, I work part time for my former UK based employer, they got me tax exemption from the UK, send my money straight into the bank over here in NZ Dollars & then I pay the tax over here
mmm....but then you miss out on any UK tax allowances and pay 18, 33 or 39% on all of that income, rather than avoiding tax/or paying less in the UK (as you would presumably be earning much of it within the relevant tax-free and lower rate allowances).
As CAN2NZ says, if the work is done in NZ then it should be taxed here irrespective of whether you are able to claim the 4 year exemption as a newly arrived NZ Tax Resident.
As the OP is doing work in NZ (I presume you are not flying abck to the UK to perform the work) then I'd suggest that you can't get that exemption.
Also bear in mind that taking the exemption will mean you can't claim family tax credits........check the detail of that on the IRD site.
I met my new accountant today and explained my situation --- I did the work whilst in the UK and because of the contract I was paid for it from the UK in GBP well after I became a NZ Tax Resident. She adivsed me that it was exempt from income tax. However, if I do further work for them on a contract basis whilst in NZ then it will be taxable.
Another issue to consider is that if you go to the IRD for advice - and they are pretty good on most things and quite helpful - make sure you get details of the person who gave you it and bear in mind what our old company accountant told me that the IRD person you speak to does not "speak for the IRD" - hence IRD can get out of any poor advice given by one of their advisors, the joys of being the state's revenue collectors, eh?
Good luck.
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