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Income Tax Act 2007

General collection rules - Employment-related taxes - Paying amounts of tax

RD 24: Exemptions for non-resident contractors

You could also call this:

“When non-resident contractors can avoid tax deductions from their payments”

This section talks about when non-resident contractors can get an exemption from having tax withheld from their payments. You can apply for this exemption in two situations:

  1. If the money you earn from your contract work isn’t assessable income. This might be because of an agreement between countries about taxes or for another reason.

  2. If you’ve paid all your income tax and followed all the tax rules for the past 24 months. The Commissioner of Inland Revenue needs to believe you’ll keep doing this in the future.

If either of these apply to you, you can ask the Commissioner for an exemption. This exemption comes from section 24H of the Tax Administration Act 1994. If you get it, no tax will be taken out of the payments for your contract work. This applies whether the payment is made to you or to someone acting for you.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1519993.

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Part R General collection rules
Employment-related taxes: Paying amounts of tax

RD 24Exemptions for non-resident contractors

  1. This section applies when—

  2. a non-resident contractor derives an amount from a contract activity or service that is not assessable income, whether because of a double tax agreement or for another reason; or
      1. the contractor has in the period of 24 months before the date of the application referred to in subsection (2) paid all income tax payable by them and complied with their obligations under the Inland Revenue Acts, and the Commissioner is satisfied that the contractor will continue to do this.

        1. The non-resident contractor may apply to the Commissioner to provide them with an exemption under section 24H of the Tax Administration Act 1994 for a contract payment made to them or another person acting on their behalf in relation to a contract activity or service set out in the certificate for which no amount of tax is to be withheld.

        Compare
        • 2004 No 35 s NC 18(1)
        • Income Tax (Withholding Payments) Regulations 1979, regulation 5(3)
        Notes
        • Section RD 24 heading: amended, on , by section 210(1) of the Taxation (Annual Rates for 2017–18, Employment and Investment Income, and Remedial Matters) Act 2018 (2018 No 5).
        • Section RD 24(1)(a): amended, on , by section 130(1) of the Taxation (Annual Rates for 2020–21, Feasibility Expenditure, and Remedial Matters) Act 2021 (2021 No 8).
        • Section RD 24(1)(b): repealed, on , by section 104 of the Taxation (Annual Rates for 2022–23, Platform Economy, and Remedial Matters) Act 2023 (2023 No 5).
        • Section RD 24(2) heading: replaced, on , by section 210(2)(a) of the Taxation (Annual Rates for 2017–18, Employment and Investment Income, and Remedial Matters) Act 2018 (2018 No 5).
        • Section RD 24(2): amended, on , by section 210(2)(b) of the Taxation (Annual Rates for 2017–18, Employment and Investment Income, and Remedial Matters) Act 2018 (2018 No 5).
        • Section RD 24 list of defined terms apply: inserted, on , by section 74 of the Taxation (Transformation: First Phase Simplification and Other Measures) Act 2016 (2016 No 27).
        • Section RD 24 list of defined terms assessable income: inserted, on , by section 130(2) of the Taxation (Annual Rates for 2020–21, Feasibility Expenditure, and Remedial Matters) Act 2021 (2021 No 8).
        • Section RD 24 list of defined terms exemption certificate: repealed, on , by section 210(3) of the Taxation (Annual Rates for 2017–18, Employment and Investment Income, and Remedial Matters) Act 2018 (2018 No 5).
        • Section RD 24 list of defined terms income: repealed, on , by section 130(2) of the Taxation (Annual Rates for 2020–21, Feasibility Expenditure, and Remedial Matters) Act 2021 (2021 No 8).