# Tax and LAFHA for Australian citizen working in NZ



## Chris12d

Hi,

I am an Australian citizen who recently got a job offer in NZ. I used to work in the mining and engineering industry in Melbourne but since the job market there is not looking too good, lots of people being laid off, high unemployment rate and not a lot of engineering jobs/projects available, particularly mining jobs (large projects being put on hold or in the bin maybe) I decided to take the job offer in NZ and give it a go. It is tough to work away from home but it's better than not having any work at all.

Anyway, I would like to know two things basically:

1. Does anybody know of a good tax specialist/accountant (preferably based in Wellington) experienced in the Double Tax Agreement/Treaty between NZ and Australia? 

I need to consult as I do not want to donate more money to the taxmen in NZ and OZ more than I have to! I have looked at the IRD and ATO website and I find it confusing. The IRD website says that "If you are a resident of both Australia and New Zealand, the double taxation agreement (DTA) between these two countries states that you will be a resident of the country where a permanent home is available to you." It then provides the table that says "if you live in both countries, then you will be a resident of the country that you are a citizen of". So I am not sure whether I should be taxed as a resident or non-resident of NZ? If I stay in NZ for less than 183 days, then I am a non-resident (10% income tax)? But If I stay more than 183 days in a year I become a resident of NZ? But this conflicts with the statement above that says I am a resident of the country that I am a citizen of (which is Australia)? Certainly do not want to be taxed twice! so If I could legally reduce my taxes that would be great.

2. Does anybody know whether LAFHA (living away from home allowance) can be offered by a NZ based company for an Australian citizen who is required to move overseas for work (but still maintains home in Australia)? I know that there is no tax incentives here in NZ like living away from home allowance, but if I would still be paying taxes in Oz, subject to Oz tax laws, then surely I can ask my employer to allocate part of my salary for LAFHA? Right? Or not? Really need to get the right advice from a good tax specialist so if anyone knows one please let me know.

Cheers,


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## escapedtonz

Chris12d said:


> Hi,
> 
> I am an Australian citizen who recently got a job offer in NZ. I used to work in the mining and engineering industry in Melbourne but since the job market there is not looking too good, lots of people being laid off, high unemployment rate and not a lot of engineering jobs/projects available, particularly mining jobs (large projects being put on hold or in the bin maybe) I decided to take the job offer in NZ and give it a go. It is tough to work away from home but it's better than not having any work at all.
> 
> Anyway, I would like to know two things basically:
> 
> 1. Does anybody know of a good tax specialist/accountant (preferably based in Wellington) experienced in the Double Tax Agreement/Treaty between NZ and Australia?
> 
> I need to consult as I do not want to donate more money to the taxmen in NZ and OZ more than I have to! I have looked at the IRD and ATO website and I find it confusing. The IRD website says that "If you are a resident of both Australia and New Zealand, the double taxation agreement (DTA) between these two countries states that you will be a resident of the country where a permanent home is available to you." It then provides the table that says "if you live in both countries, then you will be a resident of the country that you are a citizen of". So I am not sure whether I should be taxed as a resident or non-resident of NZ? If I stay in NZ for less than 183 days, then I am a non-resident (10% income tax)? But If I stay more than 183 days in a year I become a resident of NZ? But this conflicts with the statement above that says I am a resident of the country that I am a citizen of (which is Australia)? Certainly do not want to be taxed twice! so If I could legally reduce my taxes that would be great.
> 
> 2. Does anybody know whether LAFHA (living away from home allowance) can be offered by a NZ based company for an Australian citizen who is required to move overseas for work (but still maintains home in Australia)? I know that there is no tax incentives here in NZ like living away from home allowance, but if I would still be paying taxes in Oz, subject to Oz tax laws, then surely I can ask my employer to allocate part of my salary for LAFHA? Right? Or not? Really need to get the right advice from a good tax specialist so if anyone knows one please let me know.
> 
> Cheers,


Hi,

Sorry cant help with the name of a good accountant in Wellington who understands the double taxation rules between NZ and Oz.

My understanding of the DTA :-

(a) If you have a permanent home in both countries, you will pay tax or be considered resident where your personal and economic relations are closer.
(b) If you do not have a permanent home in either country, you will pay tax or be considered resident in the country that you live in.
(c) If you live in both countries	, you will pay tax or be considered resident in the country that you are a citizen of.
(d) If you don't live in either country, you will pay tax or be considered resident of the country that you are a citizen of.
(e) If none of the these apply to you then you will pay tax or be considered resident where your effective management is situated.

Whichever applies, you should only be taxed once on your income because of the DTA between the two countries.

2. Don't think you will be eligible for the LAFHA or more to the point I doubt any NZ employer will allow you to claim it via them - why would they ?
As I understand it you can only claim this from an Australian employer who has asked or needs you to work from NZ but you still maintain a home in Australia.
An NZ employer (if you're lucky) may offer some sort of relocation allowance paid with your first salary where they also cover the tax cost to give you the full amount but that will be the extent of their assistance.
If you decide to maintain a home in Oz whilst living in NZ that is your decision and your cost.

I still have a home in the UK and I live, work and pay tax in NZ.
Don't pay any tax or national insurance in the UK even though I earn rental income from my property in the UK. Luckily there is an agreement that NZ IRD don't consider overseas income for a uk immigrant for 5 yrs.


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## Chris12d

Thanks for your reply Mod


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## Donna9159

I was at the tax office this morning discussing this very same thing. Why don't you start there.


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