Still, it is vital to know how moving to the country of New Zealand changes your tax obligations in both the US and in New Zealand. Income from employment is also subject to a tax for the Accident Compensation Corporation (ACC). of each country. So, depending on income level, there is not a particularly high risk of owing high US taxes because of lower New Zealand taxes. There is not a totalization agreement, so this could be one area where Americans living within New Zealand could be subject to double taxation. The tax rates in New Zealand are similar to the United States tax rates. A person is present physically in the country for over 183 days during any period of twelve months. The changes became effective from 1 January 2011 except for provisions other than those reducing withholding tax rates, in New Zealand. The 1983 treaty was replaced by the new treaty, which came into force on 12 November 2010. A person’s tax residency in the country of New Zealand is determined by the following: The annual tax year is different in the country of New Zealand than the United States tax year. rs. name but a few. For further information read our November 2010 article on the treaty. Returns must be submitted prior to the 7th of July, but extensions through the 31st of March are available if a person is enrolled with one of the tax agencies. In the case of the New Zealand treaty, the savings clause is present in Article 1. If your only income source is employment in New Zealand, tax will be deducted at source and you don’t have to file a return. Your U.S. social security benefits may not be taxable in the United States. This is known as the ‘savings clause’ and is present in all treaties that the United States is party to. We have an expert team to provide tax advice to expats, and give you all the information you need to know to file your United States expat tax return while living outside the country. United States tax publications frequently refer to the treaty, far more so than New Zealand pronouncements. Interest income - The simplest kind of interest is if you have a bank account - the bank will pay you some percent for the privilege of holding your money. This treaty helps determine which country an expat should pay their taxes to. US citizens, as well as permanent residents, are required to file expatriate tax returns with the federal government every year no matter where they reside. Similarly, the IRS disclosure requirements of treaty benefits being claimed are strongly evident in material produced by the IRS including tax return forms. It is based on the OECD model tax treaty with some variations and was updated in 2011.