paying tax in NZ
- Thread starter ellejay
- Start date
As an accountant who has experienced this many times I prefer cleints maintain a spreadsheet summary of rental income and expenses that is continuously maintained in NZD !!!. It makes the basis for a way to cover the different tax periods and convert the NZD into AUD using the relevant rate. (usually ATO monthly average rate)
Also give your AUS agent copies of the NZ return and assessment ntc as the tax paid (if any) may be a credit in your AUS return.
NOTE : You DONT include the rental income in a rental schedule in Australia. You report it as foreign income. That way any NZ tax is credited. This avoids dual taxation.
Its a common and simple issue really. There are many issues that can be messed up.
Also give your AUS agent copies of the NZ return and assessment ntc as the tax paid (if any) may be a credit in your AUS return.
NOTE : You DONT include the rental income in a rental schedule in Australia. You report it as foreign income. That way any NZ tax is credited. This avoids dual taxation.
Its a common and simple issue really. There are many issues that can be messed up.
Thanks for all the replies. I couldn't find an Australian accountant with any real experience of this when I was looking into it. I'd just been submitting tax returns in Aus and declaring NZ rental income on them in the past. I've finally just ended up going through an NZ accountant with experience of tax systems in both countries. He's just got me to complete the spread sheets as you mention and he will send off info to an accountant in Australia to do the tax returns for us here.
You're right I was doing it completely incorrectly, paying tax in Australia on the NZ income but I thought you had to declare and pay tax in the country where you are a resident for tax purposes. New NZ accountant is going to submit retrospective tax returns for the last couple of years and I'll no doubt get a huge NZ tax bill although I already declared and paid tax on the income in Australia. Does anyone have any words of reassurance re this or should I start saving up for this now?
Sorry I don't understand the question re being a bludger. We've been here working for a few years and are Aus permanent residents and UK citizens.
You're right I was doing it completely incorrectly, paying tax in Australia on the NZ income but I thought you had to declare and pay tax in the country where you are a resident for tax purposes. New NZ accountant is going to submit retrospective tax returns for the last couple of years and I'll no doubt get a huge NZ tax bill although I already declared and paid tax on the income in Australia. Does anyone have any words of reassurance re this or should I start saving up for this now?
Sorry I don't understand the question re being a bludger. We've been here working for a few years and are Aus permanent residents and UK citizens.
There is a special category of NZ citizen visa (protected) that gives tax status as a 'temporary resident'.
This means that they are not taxed on foreign sourced income even though they would normally be.
AUS residents pay tax in NZ on income sourced in that country.
They also include the same NZ income in their AUS tax return but get a credit for the tax paid in NZ.
Sounds like backdated tax owing in NZ and tax refund in AUS.
This means that they are not taxed on foreign sourced income even though they would normally be.
AUS residents pay tax in NZ on income sourced in that country.
They also include the same NZ income in their AUS tax return but get a credit for the tax paid in NZ.
Sounds like backdated tax owing in NZ and tax refund in AUS.