Residence is a critical feature of the New Zealand tax system.
It determines whether an individual, or other entity, is exposed to New Zealand tax on worldwide income, or only New Zealand sourced income.
Since the Commissioner’s last statement on income tax residence, published in 1989 in Public Information Bulletin 180 (“PIB 180”), we have seen significant changes in the mobility of individuals and the way that business is conducted internationally.
We agree PIB 180 needs to be updated. In our view, this is needed to accommodate modern work practices and the circumstances of expatriates and migrants.
It is also needed to improve consistency in the
positions adopted by Inland Revenue’s frontline staff.
In practice, we are seeing widely differing interpretations depending on which part of Inland Revenue, or which office, is addressing the issue..