Tax for Overseas Income

Updated for 2026 IRD rates

New Zealand's Worldwide Tax System

New Zealand taxes its residents on their worldwide income. This means if you're a New Zealand tax resident, you must declare income earned anywhere in the world in your New Zealand tax return. This includes employment income, investment income, rental income, business profits, and capital gains from overseas sources.

Non-residents are only taxed on income that has a New Zealand source (such as rental income from a New Zealand property or salary earned while working in New Zealand).

Residency Rules

You are a New Zealand tax resident if you meet either of the following tests:

The 183-Day Rule

You are a tax resident if you are physically present in New Zealand for 183 days or more in any 12-month period. Once you meet this test, you become a resident from the first day of that 12-month period.

The Permanent Place of Abode Test

Even if you spend fewer than 183 days in New Zealand, you may still be a tax resident if you have a permanent place of abode here. This considers factors such as:

Whether you own or maintain a home in New Zealand
Your family and social connections
Your economic interests (bank accounts, investments, business)
The frequency and length of your visits to New Zealand
Your personal property and belongings in New Zealand

If you leave New Zealand permanently, you may become a non-resident for tax purposes after a transitional period. Contact IRD for a formal determination of your residency status.

Foreign Investment Fund (FIF) Rules

If you hold shares in foreign companies (outside Australia or New Zealand) worth more than $50,000 cost at any time during the year, the FIF rules may apply. Under these rules, you must pay tax on investment gains from certain foreign investments, even if you haven't sold them or received any income.

The FIF rules use one of several calculation methods, including:

Fair Dividend Rate (FDR): 5% of the opening value of the investment is treated as deemed income
Comparative Value (CV): Based on the actual change in value of the investment over the year
Cost method: For certain types of investments

Exemptions apply for investments in Australian listed companies, certain venture capital investments, and where the total cost of all FIF interests is under $50,000.

Double Tax Agreements (DTAs)

New Zealand has double tax agreements with over 40 countries. These agreements prevent the same income from being taxed twice — once in New Zealand and once in the foreign country. Typically, DTAs provide:

That certain types of income are only taxable in one country
That the foreign tax paid can be credited against your New Zealand tax liability
Reduced withholding tax rates on dividends, interest, and royalties

If you've paid foreign tax on income that is also taxable in New Zealand, you can claim a foreign tax credit in your New Zealand tax return. The credit is generally the lower of the foreign tax paid or the New Zealand tax payable on that income.

Reporting Overseas Income

Overseas income is reported in your annual IRD tax return:

Employment income: Include gross foreign wages in NZ dollars
Investment income: Include interest, dividends, and FIF income
Rental income: Include net rental income from overseas properties
Business income: Include profits from overseas businesses

You must convert foreign income to New Zealand dollars using the exchange rate at the time you earned the income (or an approved annual average rate).