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Going Overseas? Sort out your tax affairs before you go!

October 15, 2015

There are some things you need to do and know about before you go overseas to make sure your obligations and entitlements with us are sorted. What you need to think about depends on the amount of time you're away.

The following are some of the things you need to consider before you go overseas. If you're registered for other taxes (such as GST or PAYE) you'll need to discuss these with us as well.

Income tax

If you're away for less than 325 days in any 12-month period, you're a New Zealand resident for tax purposes. Any income you receive from an overseas source is taxable in New Zealand and you'll need to file an Individual tax return (IR3) at the end of the year (31 March). Any tax you pay on your overseas sourced income will generally be taken into account (up to the amount payable in New Zealand).

If you're away for more than 325 days in any 12-month period you may become a non-resident for tax purposes (the 325 days don't have to be consecutive). Non-residents don't need to declare income earned overseas as it will be taxed at source. But you will need to declare any New Zealand income. You may also need to file an IR3 or IR3NR at the end of the tax year (31 March) depending on the source of your income.

Working for Families Tax Credits

You need to contact us to see if you can still receive Working for Families Tax Credits (WfFTC) if you leave New Zealand (other than for a short holiday).

If you're eligible to receive WfFTC, and you or your partner earn overseas income while you're away, you must file an IR3 at the end of the year (31 March). Your WfFTC will be based on the income you earn in New Zealand and overseas.

If you're non-resident for tax purposes, you can't get WfFTC. You'll also need to file an IR3 so we can calculate your WfFTC entitlement for the time you lived in New Zealand.

Child support

Liable parents need to contact us to make sure any child support obligations are up to date before leaving. You'll also need to arrange for your child support payments to continue while you're away.

We match information with New Zealand Customs so we're notified when liable parents with outstanding child support debt travel in and out of New Zealand. We'll use this information to try and contact the liable parent to make arrangements to repay the debt, or pursue other collection processes. If necessary, we can also take legal steps to prevent certain liable parents from leaving the country.

Carers planning to move overseas should also contact us, because we need to know about any changes to your income or circumstances.

If you're leaving the country and need further information about your child support obligations, please contact us on 0800 221 221 between 8am and 5pm weekdays.

Student loans

You'll still be eligible for an interest-free student loan if you're going overseas for 183 days or less and you've been living in New Zealand for at least 183 consecutive days prior to leaving.

Student loan repayments are still required to be deducted from any New Zealand salary or wages you receive while you're away.

You'll need to let us know at the end of the tax year (31 March) about any other income you earn from New Zealand and/or overseas. This is because you're still a New Zealand-based borrower and your repayments are based on your worldwide income.

If you're away for 184 days or more, you'll become an overseas-based borrower. Your loan will no longer be interest-free from the day after you leave New Zealand, even if you're on a repayment holiday.

You need to make two payments each year towards your student loan, based on your total loan balance. The due dates for these payments are generally 30 September and 31 March.

Total loan balance Instalment 1
(30 September)
Instalment 2
(31 March)
Yearly amount
under $1,000 half of your
loan balance
remainder of your
loan balance
total
loan balance
$1,000 - $15,000 $500 $500 $1,000
$15,000 - $30,000 $1,000 $1,000 $2,000
$30,000 -$45,000 $1,500 $1,500 $3,000
$45,000 - $60,000 $2,000 $2,000 $4,000
over $60,000 $2,500 $2,500 $5,000

You can pay us through the online money transfer companies listed on our website. They all offer a fee-free service for student loan payments made from overseas. They can also set up recurring payments so it's easier for you to meet your repayment obligations.

If you're in Australia, you can set up a PayWay direct debit for your student loan repayments. You can also pay using Australian dollars from your Australian bank account. We'll cover the cost of the currency conversion.

You can also pay online using your credit or debit card. We waive the convenience fee for student loan repayments made from overseas.

Find out all your payment options

If you don't make your repayments on time, you may be charged late payment interest.

Repayment holidays are optional. You don't need to make payments towards your student loan when you're on a repayment holiday. You can apply for a repayment holiday through myIR before you leave or within the first 183 days of being overseas. You need to provide an alternative contact person when you apply.

KiwiSaver

If you're a KiwiSaver member and permanently emigrate you can make an arrangement with your scheme provider to take a break or make payments from overseas. After you've been overseas for one year you can withdraw your funds and close your KiwiSaver account, if you've moved permanently to a country other than Australia.

If you're moving permanently to Australia you can either leave your funds in a New Zealand KiwiSaver scheme or transfer them to an Australian complying superannuation scheme.

For more information about transferring or withdrawing your funds and closing your KiwiSaver account contact your KiwiSaver scheme provider.

What to do next

To ensure your tax affairs are in order before you go overseas, call us on 0800 377 772 and give us your departure date.

We'll tell you if you need to file a return and we'll also be able to set up a nominated person for the time you're away. A nominated person is someone in New Zealand who can deal with your tax affairs on your behalf. You don't have to set up a nominated person but we encourage you to do so as we can't discuss your tax details with anyone else without your authority.


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