Income Worldwide must be Declared

Posted: 15th July 2011

New Zealand residents have to declare all income they receive from anywhere in the world. 

"Income" now has a very strange meaning.  For example, if you hold shares in a United States company which does not generate any dividends, you have income.  This is because your income is calculated based on the value of those shares.

Overseas life insurance policies and superannuation funds can also be classed as a source of income, even though you might not receive any money from them.  Be sure to tell us if you have one of these.  If a policy is taken out in New Zealand with an overseas insurance company, there's no tax problem.

The IRD has been making agreements with a large number of overseas countries to swap information, so don't rely on not being caught.

Some people think they need to declare income only if they bring money back to New Zealand.  This is not correct, even if they have paid tax overseas.  New Zealand residents are taxed on their worldwide income.  Usually, there is a credit for some or all of the foreign tax paid.  There can be special tax rules in regard to declaring overseas income for people coming to live here from overseas.  They last for four years. 

If you have any queries regarding the above, please contact Martyn Henderson on 09 308 4050 or martyn.henderson@tbag.co.nz

Source: NZCA