NZ Income Tax Exemption for new migrants: can it work?

[BerlusconiSchmidt]

Exemptions for new migrants A temporary (four year) exemption from income tax is available on certain foreign income derived by new migrants or New Zealanders who return to New Zealand after an absence of at least ten years. The exemption applies to people becoming resident in New Zealand on or after 1 April 2006.


I have not been in New Zealand for 15 years. I earn my money online. Does that mean that if I move back to NZ, I can get paid by my own foreign company (e.g: Dubai freezone) in Dividends only,
and therefore pay no tax since Foreign Dividends are Tax Free both in UAE and NZ for the first 4 years?

It clearly says Foreign dividends are Tax exempt, but a Salary is not. So, if I pay myself a small $3K salary and then $200K a year in Dividends, that should work to make it Tax exempt for 4 years right?
I mean, they wrote it this way...


Also, would my own offshore company be deemed a NZ resident since I'd spend the majority of the fiscal year in New Zealand?

 

[Sols]

Exemptions for new migrants A temporary (four year) exemption from income tax is available on certain foreign income derived by new migrants or New Zealanders who return to New Zealand after an absence of at least ten years. The exemption applies to people becoming resident in New Zealand on or after 1 April 2006.


I have not been in New Zealand for 15 years. I earn my money online. Does that mean that if I move back to NZ, I can get paid by my own foreign company (e.g: Dubai freezone) in Dividends only,
and therefore pay no tax since Foreign Dividends are Tax Free both in UAE and NZ for the first 4 years?

Would be a good idea to clarify your situation with IRD and/or a New Zealand based tax lawyer as these programs often small details that aren't immediately available in the summaries published online.

That said, though, what you describe is what New Zealand wants to attract.

Also, would my own offshore company be deemed a NZ resident since I'd spend the majority of the fiscal year in New Zealand?

This only works if your income is actually genuinely foreign. It's meant for passive shareholders. If you're actively running the business, the IRD may decide that your company is tax resident in New Zealand.

 

[BerlusconiSchmidt]

Would be a good idea to clarify your situation with IRD and/or a New Zealand based tax lawyer as these programs often small details that aren't immediately available in the summaries published online.

That said, though, what you describe is what New Zealand wants to attract.


This only works if your income is actually genuinely foreign. It's meant for passive shareholders. If you're actively running the business, the IRD may decide that your company is tax resident in New Zealand.

Makes sense, more grey laws as usual, I will contact a local Tax lawyer and see if they actually know anything about this... makes me wonder this is why KimDotCom moved to NZ? or am I wrong?

 

[Sols]

makes me wonder this is why KimDotCom moved to NZ? or am I wrong?

It's one of the reasons how New Zealand has successfully attracted wealthy people such as Mr. Dotcom. Another is that to a lot of people who predict an end of the world coming soon, New Zealand offers an almost unique blend of stability and remoteness.

The vast majority of very wealthy people aren't looking for places with no tax, TBH. There are so many methods you can use in high-tax jurisdictions to control how much tax you pay, once you have certain levels of financial means. When you own a multinational company with genuine offices and substance, no one is going to come after you about corporate tax residence just because you happen to own the company or even sit on the board of directors (as one of many directors).