Tax relief for New Zealand may be possible under a double taxation agreement. In general, New Zealand`s double taxation agreements provide for an exemption from labour income when the worker is present in New Zealand for 183 days or less, is employed by a non-resident organization and is not paid by a stable establishment (PE) in New Zealand. However, the treaty allows U.S. emigrants to avoid double taxation of their income in New Zealand by allowing them to benefit from U.S. tax credits if they file their return on the same value as New Zealand income taxes they already paid when filing their U.S. tax returns. The treaty has several objectives, the most important of which is the possibility of facilitating double taxation. To facilitate this objective, the two bodies of national legislation, the New Zealand Income Tax Act and the United States Internal Revenue Code, refer to the treaty. The U.S.-New Zealand tax treaty was signed in 1982 and a protocol was added in 2008. The treaty aims to prevent double taxation for Americans living in New Zealand and New Zealanders living in the United States from preventing U.S.
citizens living in New Zealand from having to submit U.S. taxes. New Zealand has a welfare system that must be paid by income in New Zealand. In the absence of a totalization agreement between the United States and New Zealand, this could be one aspect of U.S. foreign taxes, where the Americans face double taxation in New Zealand. The U.S. Social Security Administration provides U.S. emigrants with a social security declaration in New Zealand so that taxpayers know exactly what they are making their contributions.
In addition to New Zealand`s national regulations that allow for an exemption from international double taxation, New Zealand has entered into double taxation with 40 countries/jurisdictions to prevent double taxation and to allow cooperation between New Zealand and foreign tax authorities to enforce their respective tax laws. Please note the second protocol of the 1982 agreement. There is potential for the creation of an MOU as a result of extensive business travel, but this would depend on the nature of the services provided, the duties and degree of authority of the worker and the specific conditions of an applicable double taxation agreement. The United States is one of the few governments to tax the international incomes of its citizens and permanent residents residing abroad. However, there are provisions that protect against possible double taxation. These include: a certificate of exemption may be issued by the Inland Revenue Department (IRD) to remove this withholding tax obligation if the IRD is satisfied that the income collected in New Zealand is not liable for income tax under a double taxation agreement. Keep in mind that tax-free withholding tax represents a flat rate of 15%, which can be reduced under the U.S. Double Taxation Agreement with New Zealand. There is currently no social security agreement (or totalization agreement) between the U.S.
government and the New Zealand government.