The specifics of how the DTA applies can be complex and depend on your individual circumstances, including your tax residency status and the nature of your income. Therefore, it’s recommended that you consult with a tax professional to understand how the DTA applies to your situation.
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“I moved to NZ in April 2021 from the US with my partner; just prior to shifting i got a new contracting job in the states. I am in NZ on a 2 year – work visa, but have retained my US job and earn all of my income via that.
I know that NZ and the United states has a Double Tax Agreement (DTA), however it seems fairly complex to find out if i qualify for it. I pay 15% federal tax, and a further 15% tax as a contractor (total 30%) in the US; I’m yet to declare or pay tax in NZ, but trying to figure out how it all works.
My understanding is that the 15% federal tax can be offset, but will the remaining 15% contractor tax be able to be offset by the DTA also? Any advice?”
(Original question on Reddit)
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The Double Tax Agreement (DTA) between the United States and New Zealand is designed to prevent double taxation for people who are tax residents in both countries.
The DTA works by giving one country or territory the right to tax certain income and exempting it in the other state. It also allows for tax credits where both countries or territories tax the same income.
The agreement between the US and NZ was signed on 1 December 2008 and came into force on 13 November 2010. The agreement includes lower withholding taxes on dividends, interest, and royalty payments between the two countries.
However, the specifics of how the DTA applies can be complex and depend on your individual circumstances, including your tax residency status and the nature of your income. Therefore, it’s recommended that you consult with a tax professional to understand how the DTA applies to your situation. Consider contacting the IRD to get more information.
Hope this helps.
Regards, Clive Fernandes (Financial Adviser)
Director – National Capital
Disclosure: I am the director of National Capital, a KiwiSaver advice firm. The views expressed in this article are the views of the author. The information provided is of a general nature and is not intended to be personalised financial advice. You may seek appropriate financial advice from a Financial Adviser to suit your individual circumstances or contact National Capital.
