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New Zealand law explained for everyone

Income Tax Act 2007

Taxation of certain entities - Agents

HD 16: Non-resident general insurers

You could also call this:

“Tax responsibilities for overseas insurance companies operating in New Zealand”

This section is about how income tax is handled for insurance companies that are not based in New Zealand but earn money here. Here’s what you need to know:

The insurance company is usually responsible for reporting their income and paying taxes on it. If they do this, no one else has to.

Sometimes, someone else might report the income and pay the tax for the insurance company. This could be a person who pays the insurance premium on behalf of someone else, like an insurance broker or agent. If they do this, the other people mentioned in this law don’t have to.

If no one has done it yet, there’s an order of who should handle the tax:

First, it’s the person who pays the premium to the insurance company or to someone who doesn’t have a business in New Zealand.

Second, it’s the person who pays the premium, even if they use a broker or agent.

Third, it’s the person who is insured.

There’s a special rule for banks and building societies. If they pay a premium for someone, they’re not responsible for the tax. Instead, the person who gave the bank or building society the money for the premium is responsible.

Remember, this is all about making sure the right taxes are paid on money earned by overseas insurance companies in New Zealand.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1517424.

Topics:
Money and consumer rights > Taxes
Business > Industry rules
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Part H Taxation of certain entities
Agents

HD 16Non-resident general insurers

  1. This section applies when an insurer derives income under section CR 3 (Income of non-resident general insurer) to determine who is liable to provide a return of income and pay income tax on the income.

  2. To the extent to which the insurer provides the return and pays the income tax, no other person described in this section is liable to do so.

  3. To the extent to which a person on behalf of the insurer, including a broker or other agent who pays a premium on behalf of another person, provides the return and pays the income tax, no agent described in any of subsections (4) to (6) is liable to do so.

  4. The person liable in the first place as an agent is—

  5. a person, including a broker or agent, who pays the premium to the insurer or to some other person not carrying on a business in New Zealand through a fixed establishment in New Zealand; or
    1. a person described in subsection (7)(b).

      1. The person liable in the second place as agent is a person who pays the premium, whether or not through a broker or agent.

      2. The person liable in the third place as agent is the insured person.

      3. If a premium is paid by a registered bank, as defined in section 2 of the Banking (Prudential Supervision) Act 1989, or a building society on behalf of a person to the insurer or to some other person not carrying on a business in New Zealand through a fixed establishment in New Zealand,—

      4. the bank or building society is not an agent of the insurer; and
        1. the person who provides the bank or building society with the funds from which the premium is paid is an agent of the insurer.

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          Notes
          • Section HD 16(7): amended, on , by section 300(1) of the Reserve Bank of New Zealand Act 2021 (2021 No 31).