New Zealand: Tax obligations of non-resident employers

When non-resident employers have an obligation to withhold PAYE or remit FBT and ESCT

When non-resident employers have an obligation to withhold PAYE or remit FBT and ESCT

Inland Revenue finalized its position that non-resident employers only have an obligation to withhold “pay as you earn” (PAYE) or remit “fringe benefits tax” (FBT) and “employers superannuation contributions tax” (ESCT) if:

  • The employer has “sufficient presence” in New Zealand to be subject to New Zealand tax law, and
  • The services performed by the employee are attributable to the employer’s presence in New Zealand.

Inland Revenue also confirmed that no PAYE withholding obligation arises on a non-resident’s foreign-sourced income or if the employee’s income is exempt under a provision in the domestic law or an income tax law.

Inland Revenue finalised its position in OS 21/04 [PDF 312 KB] (1 December 2021).

Read a December 2021 report prepared by the KPMG member firm in New Zealand


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