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What is my company's tax residency

 When is a company considered a New Zealand resident?

A company is resident in New Zealand if it meets any one of the following criteria:

Criteria Description
It is incorporated in New Zealand A company incorporated under the New Zealand Companies Act 1993 is resident in New Zealand.
Control by company directors is exercised in New Zealand Those acting in their capacity as directors control the company here, whether decision making is confined to New Zealand or not.
It has its centre of management in New Zealand This is the place from where the company as a whole is managed on a day-to-day regular basis.
It has its head office in New Zealand The head office of a company is the office from which the business of the company is directed and carried out. The focus of the test is the physical place of administration and management which is superior to all others.

 Rules around permanent establishment

The double tax agreement (DTA) between most countries and New Zealand states that a company with a permanent establishment in New Zealand will have income tax requirements here.

Criteria Description
A permanent establishment for a business is a fixed place where the business activity is wholly or partly carried on.

This includes:

  • a place of management
  • a branch
  • an office
  • a factory
  • a workshop
  • a mine, an oil or gas well, a quarry or any other place of extraction of natural resources
  • an agricultural, pastoral or forestry property; and
  • a building or construction site, installation or assembly project that lasts more than six months.
The company may also have a permanent establishment in other circumstances.

This includes

  • carrying on supervisory activities in connection with a building or construction site, installation or assembly project for more than six months, or
  • carrying on activities which consist of, or which are connected with, the exploration for or exploitation of natural resources situated in New Zealand, or
  • using substantial equipment in New Zealand, for more than six months, for or under contract with the enterprise, or
  • performing any operations for the felling, removal or other exploitation of standing timber.
The company does not have a permanent establishment if it only uses facilities in New Zealand for certain activities.

These are:

  • storage, display or delivery of goods or merchandise
  • maintenance of goods or merchandise that are used for the storage, display or delivery of the company's merchandise
  • maintenance of goods or merchandise that belongs to the company but are used for processing by another entity
  • maintenance of a fixed place of business that is only used for purchasing goods or merchandise or collecting information for the company
  • maintenance of a fixed place of business that is used for any other activity of an introductory or supporting nature, such as advertising or scientific research.

 Applying for an IRD number for your company

If your company is deemed to be a resident of New Zealand, you will need to apply for an IRD number by completing an:
IRD number application - resident non-individual (IR596) form.