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Any New Zealanders paying tax to IRD NZ?

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  • Any New Zealanders paying tax to IRD NZ?

    I've lived in Japan for about ten years and pay no tax back home. Now, I'm making investments in bonds etc. in NZ under "non-resident for tax purposes" at 15%.

    Looking at the NZ IRD website it seems I am in fact supposed to pay tax in NZ because I have an "enduring relationships" (family), and intend to return someday (so am not "non-resident").

    Kiwi's (and Aussies), are you paying tax back home? What tax rate are you for investments/ banking?
    Last edited by yukev; 2012-06-11, 12:46 PM.

  • #2
    Originally posted by yukev View Post
    Looking at the NZ IRD website it seems I am in fact supposed to pay tax in NZ because I have an "enduring relationships" (family), and intend to return someday (so am not "non-resident").

    Kiwi's (and Aussies), are you paying tax back home? What tax rate are you for investments/ banking?
    I pay income tax back home as I have investment property and file an IRD return every year. If you have a bank account back home, earn interest or dividends then by law you are supposed to declare it as its considered income earned in New Zealand. Lots of stuff is written off from depreciation etc so if you have other assets on paper that are losing money then you can probably end up not paying anything to the taxman in New Zealand.

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    • #3
      Originally posted by KansaiBen View Post
      Lots of stuff is written off from depreciation etc so if you have other assets on paper that are losing money then you can probably end up not paying anything to the taxman in New Zealand.
      Can you say more about this?
      What do you mean by "depreciation" (sorry tax-noob), and why would I be losing money on assets?
      I make money on interest on NZ investments, and my income in Japan of course, but I'm not "losing" anything (except my accent).

      Cheers

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      • #4
        Originally posted by yukev View Post
        Can you say more about this?
        What do you mean by "depreciation" (sorry tax-noob), and why would I be losing money on assets?
        I make money on interest on NZ investments, and my income in Japan of course, but I'm not "losing" anything (except my accent).

        Cheers
        Depreciation is what happens when something goes down in value. You buy a brand new car it depreciates as soon as you drive it off the lot. Take it back the next day the dealer will give you 50% of what you paid for it as its now a used car. it depreciates 50% when you take it home. Houses go up in value but at the same time they get older. they become "used" and the tax accountant will depreciate the asset to make it look as if you are losing money, even if its gone up in value.


        If you want to avoid paying money to the tax office you have to show you are losing money and in the case of real estate they will depreciate the value of the asset every year i.e becoming less in value, even if in real life it is increasing in value. Unlike earning a salary if you have money from investments they post a loss and tax you on what is left over. With salary they tax you first and you live on what is left. thats why rich people put all their money and assets into property etc as actual taxes are lower than if you work for a salary.




        If you have things like dividends and shares you are supposed to pay a percent of your dividend as tax, or if they have capital gain in NZ (you buy shares, sell them six months later and any "profit" is capital gain, you will be taxed on your earnings. If your accountant shows you show a book loss on your investments (but not a real loss) you pay less tax.

        You have to know what is deductible from your taxes

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        • #5
          Originally posted by KansaiBen View Post
          Depreciation is what happens when something goes down in value. You buy a brand new car it depreciates as soon as you drive it off the lot. Take it back the next day the dealer will give you 50% of what you paid for it as its now a used car. it depreciates 50% when you take it home. Houses go up in value but at the same time they get older. they become "used" and the tax accountant will depreciate the asset to make it look as if you are losing money, even if its gone up in value.

          If you want to avoid paying money to the tax office you have to show you are losing money and in the case of real estate they will depreciate the value of the asset every year i.e becoming less in value, even if in real life it is increasing in value. Unlike earning a salary if you have money from investments they post a loss and tax you on what is left over. With salary they tax you first and you live on what is left. thats why rich people put all their money and assets into property etc as actual taxes are lower than if you work for a salary.

          If you have things like dividends and shares you are supposed to pay a percent of your dividend as tax, or if they have capital gain in NZ (you buy shares, sell them six months later and any "profit" is capital gain, you will be taxed on your earnings. If your accountant shows you show a book loss on your investments (but not a real loss) you pay less tax.

          You have to know what is deductible from your taxes

          Thanks for that. I don't use an accountant - is it worthwhile for the average bloke?

          What benefits are there for paying tax back home in NZ anyway?

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          • #6
            Originally posted by yukev View Post
            Thanks for that. I don't use an accountant - is it worthwhile for the average bloke?

            What benefits are there for paying tax back home in NZ anyway?
            IT really depends on what type of investments you are talking about. If its just straight shares and dividends then you can simply list what your returns were on your tax return and the IRD will calculate what you owe if anything. It may be offset against other income you have in New Zealand. If you are talking about only a couple of hundred dollars it may not even be worth it.

            I make about $20,000 a year in rental income and as such it is fully taxable. Being an investment property its treated like a business and stuff can get written off as a tax expense, things such as interest on loans, accountants fees, legal fees, money spent on upgrades and maintenance. You can not do that as an individual per se on a salary. Think of yourself as being like a small corporation- you are investing for profit and if those investments make money the IRD will want its cut. Tax avoidance is LEGAL which is why people hire accountants to do all the numbers. Tax evasion however is NOT legal.

            If you want the name of an accountant in Auckland to talk to I can introduce mine. They are very good and have been using them for many years.
            Last edited by KansaiBen; 2012-06-11, 03:58 PM.

            Comment


            • #7
              Originally posted by KansaiBen View Post
              IT really depends on what type of investments you are talking about. If its just straight shares and dividends then you can simply list what your returns were on your tax return and the IRD will calculate what you owe if anything. It may be offset against other income you have in New Zealand. If you are talking about only a couple of hundred dollars it may not even be worth it.

              If you want the name of an accountant in Auckland to talk to I can introduce mine. They are very good and have been using them for many years.


              But what about your Japanese income, do you provide all the details to NZ IRD on that - and what tax rate are you on in NZ?

              Yes thanks, what is the name of the accountant?

              Comment


              • #8
                Originally posted by yukev View Post
                But what about your Japanese income, do you provide all the details to NZ IRD on that - and what tax rate are you on in NZ?

                Yes thanks, what is the name of the accountant?
                Income in japan is not taxed in NZ, only NZ based income

                Go to http://www.davidson.co.nz they are in Newmarket in Auckland. My accountants name is Brent though Russell du Plessis should be able to help you.

                Comment


                • #9
                  Originally posted by KansaiBen View Post
                  Income in japan is not taxed in NZ, only NZ based income

                  Go to http://www.davidson.co.nz they are in Newmarket in Auckland. My accountants name is Brent though Russell du Plessis should be able to help you.

                  Great, thanks for that.

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                  • #10
                    Some of the information abobe (a lot actually) is not quite right.

                    What you need to do is see if you can become a "non-resident for tax purposes". To do that IRD will want you to prove that you don't have an "enduring relationship" with NZ. Some things are "must not have" and some things are on a case-by-case basis.

                    If you do not have your wife there, then the family ties does not count (ie ex-wife, your parents, non-dependent children, bro etc living in NZ do not count).

                    If you own property in NZ the IRD will say you do have an enduring relationship and you can not become non-resident for tax purposes. If you have property in a trust then that may be ok still.

                    A bit of money in the bank wont count against you too much as you've been away for 10 years. Have a look at this page and fire any further questions http://www.ird.govt.nz/international...ency/personal/

                    Comment


                    • #11
                      Originally posted by jrp View Post
                      Some of the information abobe (a lot actually) is not quite right.

                      What you need to do is see if you can become a "non-resident for tax purposes".
                      You know you guys (esp KB) are giving away the goose that lays the golden egg.

                      Now Kiwiland will get labeled an offshore tax haven by powers that you have no comprehension of, and YOU will be responsible.

                      I will make sure of it.
                      Last edited by guyjeen; 2012-06-11, 09:40 PM.

                      Comment


                      • #12
                        Originally posted by guyjeen View Post
                        You know you guys (esp KB) are giving away the goose that lays the golden egg.

                        Now Kiwiland will get labeled an offshore tax haven by powers that you have no comprehension of, and YOU will be responsible.

                        I will make sure of it.
                        I am absolutely happy to take all the responsibility - especially if I get paid more - as long as I can still blame someone else.

                        Comment


                        • #13
                          Originally posted by KansaiBen View Post
                          IT really depends on what type of investments you are talking about. If its just straight shares and dividends then you can simply list what your returns were on your tax return and the IRD will calculate what you owe if anything. It may be offset against other income you have in New Zealand. If you are talking about only a couple of hundred dollars it may not even be worth it.

                          I make about $20,000 a year in rental income and as such it is fully taxable. Being an investment property its treated like a business and stuff can get written off as a tax expense, things such as interest on loans, accountants fees, legal fees, money spent on upgrades and maintenance. You can not do that as an individual per se on a salary. Think of yourself as being like a small corporation- you are investing for profit and if those investments make money the IRD will want its cut. Tax avoidance is LEGAL which is why people hire accountants to do all the numbers. Tax evasion however is NOT legal.

                          If you want the name of an accountant in Auckland to talk to I can introduce mine. They are very good and have been using them for many years.
                          And yet, you still don't pay your national health insurance premiums.

                          Shockingly,
                          A.

                          Comment


                          • #14
                            Originally posted by Andun
                            Not really. Yes, you can become a non-resident for tax purposes, but you still pay 15% tax.
                            I am a "non resident" now, paying 15% on my NZ investments, but if I became "resident" for tax purposes my NZ income would be extremely low so I would be on the lowest tax rate (10%). No?

                            Are you guys saying it's better to remain "non-resident"?

                            I wonder if I would be eligible for a pension once I return (have worked in in NZ for about 10 years as well).

                            Comment


                            • #15
                              Originally posted by Agitator View Post
                              And yet, you still don't pay your national health insurance premiums.

                              Shockingly,
                              A.
                              So sue me. That's between me and the government.

                              Phlegmatically,


                              K.B.

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