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HD 20: Persons carrying on business for absentees
or “Running a business in NZ for someone living overseas”
You could also call this:

“Partners responsible for tax on income of non-resident partners”

This section of the law applies to you if you run a business in New Zealand as part of a partnership that isn’t a limited partnership, or if you’re a general partner in a limited partnership that does business in New Zealand.

If you’re working with someone who doesn’t live in New Zealand (an absentee) in your partnership, or if you’re managing a limited partnership where one of the limited partners is an absentee, the law sees you as that person’s agent. This means you’re responsible for their share of the partnership’s income.

The law treats partnerships as if they don’t exist for tax purposes, which means the partners are taxed individually on their share of the income. As the agent for an absentee partner, you’re responsible for dealing with their portion of the tax.

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Next up: HD 21: Companies

or “Rules for companies paying dividends to non-residents”
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Part H Taxation of certain entities
Agents

HD 20BGeneral partners and partners carrying on with or managing business involving absentees

  1. This section applies to a person who—

  2. in New Zealand carries on a business in a partnership that is not a limited partnership:
    1. is a general partner of a limited partnership that carries on a business in New Zealand ignoring section HG 2 (Partnerships are transparent).

      1. If the person carries on the business with an absentee or, as a general partner, is responsible for the management of a limited partnership in which a limited partner is an absentee, the person is treated as the agent of the relevant absentee in relation to the absentee’s partnership share of the partnership’s income under section HG 2.

      Notes
      • Section HD 20B: inserted, on , by section 18(1) of the Taxation (Limited Partnerships) Act 2008 (2008 No 2).
      • Section HD 20B(1) heading: inserted (with effect on 1 April 2008), on (applying for the 2008–09 and later income years), by section 140(1) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).
      • Section HD 20B(2) heading: inserted (with effect on 1 April 2008), on (applying for the 2008–09 and later income years), by section 140(1) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).