New Zealand

Tax Filing In New Zealand For International Students – A Comprehensive Guideline

Tax filing in New Zealand for international students – if you are looking for more information on this topic, you have come to the right place.

International students residing in New Zealand pay taxes to the government in the form of Goods and Service Tax (GST) and Income Tax. Taxes get cut automatically from the income a person earns in New Zealand. Even though it is not necessary for all international students to file for their tax returns in New Zealand it would prove to be beneficial if you do so.

If the student has overpaid his/her taxes to the government filing for tax returns enables them to get a refund. In case the student has reached New Zealand halfway through the tax year or has an income from overseas it is important that they file for a tax return in New Zealand.

The financial year in the country begins on the 1^st of April every year and closes on the 31^st of March the next year. The last date for filing for tax returns in New Zealand is on the 7^th of July.

Tax Filing In New Zealand For International Students – Quick Facts

The financial year in New Zealand begins on the 1^st of April and ends on the 31^st of March the following year
The deadline for filing tax returns in New Zealand is on the 7^th of July
An international student needs to file for tax returns at the Inland Revenue Department

Tax Filing In New Zealand For International Students – Inland Revenue Department Number Or The IRD Number

An international student needs to pay taxes on any income earned in New Zealand.
For this, the student requires an IRD number.
The IRD Number allows the employer to pay you legally.
The highest rate of taxes is deducted when an individual does not have an IRD number.
An international student needs to apply for the IRD number as soon as he/she arrives in New Zealand.
This allows the authorities to tax a student for the right amount of taxes when he/she starts earning wages in New Zealand.

How Can You Get An IRD Number?

An international student needs to fill an IRD number application- resident individual (IR595) form
Or apply for the number online on the Inland Revenue’s website
You can also call the Inland Revenue Department on their phone and ask them to send you an application form
In case the international student requires a language interpreter he/she can request for a language line
On submitting the completed application form to the Inland Revenue Department the international student receives the IRD number within 8-10 working days

Pay As You Earn Or PAYE

Before receiving payment each payday the employer deducts an amount as taxes
This process of a tax deduction is referred to as PAYE
A PAYE record is maintained by the employer
To understand the amount deducted as taxes the international students can request their PAYE records.
Choose a tax code
The tax code is based on the number of jobs taken up by the international student
Being eligible for a tax credit reduces the amount a student has to pay as taxes
The international student could get a tax refund once the tax credit is calculated by the end of the financial year in New Zealand.

If you are an international student who has a visa that allows you to do part-time work and you are doing it you need to make sure that:

Your employer pays you the right amount of wages
And you pay the correct amount of taxes to the authorities

Make Sure You Are Paying The Right Amount Of Taxes

Many international students end up owing hundreds or thousands of dollars to the IRD because they’ve failed to file for their tax returns correctly.

You could be a student who only has one part-time job but the IRD thinks you earn much more than what you do because you’ve used the wrong tax code. Avoid these mistakes while filing for your tax returns to get a tax refund that you are eligible for.

Tax Filing In New Zealand For International Students – How To Pay The Right Amount Of Taxes?

To pay the correct amount of taxes to the IRD you need to consider the following:

Whether you are working on a contract basis
Or as an employee
The tax code you’ve chosen
If you are working on a contract you need to give your payer a tax rate notification for contractors (IR330C)
Tax code declaration form (IR330) needs to be submitted to the employer if you are working as an employee
An international student who has been employed only for part of the year will get a tax refund.
The student needs to request a personal tax summary for the particular year.
If your yearly earnings are less than $2,340 the amount is not taxable.
You don’t have to include this amount in your personal tax summary or while filing for tax returns.
This includes money earned as a self-employed person or someone who does occasional jobs for a neighbor or friend

Double Taxation

There are times when an international student gets taxed both in New Zealand as well as in their native country. This means you could end up paying taxes twice on the same income.

As a relief to the taxpayers, New Zealand offers credits for the income that has been taxed twice. However, you need to file for a tax return in New Zealand to get relief in taxes in such situations.

New Zealand has an agreement on double taxation with 39 nations around the world. If you are a student from one of those nations you wouldn’t have to pay taxes twice on the same income.

Tax Filing In New Zealand For International Students – The Process

An international student who has worked in New Zealand can claim a portion of the income tax that has been deducted regularly from his/her payslip. You need to file for a tax return at the end of a financial year to be eligible for a tax refund.

Tax Filing In New Zealand For International Students – Documents

An Inland Revenue number (IRD number)
Summary of all the income earned in New Zealand during the financial year
Additional details of income including income through business, farming, by rent or from overseas (business income records or statements)
Statements of dividends and interests if any
Maori authority distribution statements that are taxable

Tax Filing In New Zealand For International Students – Ways To File For Taxes

File For Tax Returns Online

Register yourself with an online password on MyIR online services
Login to your MyIR account
Click on My income tax
You need to select IR3 return
File for your tax returns online by providing all the required information and supporting documents

File For Your Income Tax Returns On Paper

Fill in the Individual Income Tax Return form (IR3) sent to you by the IRD
This form usually gets to a taxpayer by May every year
If you haven’t received the form by May you need to download the IR3 form and take printouts
Fill in the IR3 form carefully and attach all the supporting documents
Send it to the IRD by mail by the 7^th of July
If you are unable to file it by the deadline you need to request for an extension
If you fail to do so you’ll be charged a fine

The Inland Revenue Department on receiving your IR3 return processes it. Within a period of 10 weeks, you get a return acknowledgment that confirms your assessment.