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New Zealand and Australia: Determining tax residency of dual-resident companies

New Zealand and Australia: Determining tax residency

New Zealand’s Inland Revenue and the Australian Taxation Office (ATO) reached an agreement for determining the tax residency of dual-resident companies.


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Determining the location where a dual-resident company is a tax resident is relevant under the New Zealand-Australia income tax treaty (as well as under certain other income tax treaties). Dual-resident companies must now seek formal confirmation from the tax authorities to agree on their tax residency under applicable income tax treaty. This change applies from 1 January 2019 for the income tax treaty between New Zealand and Australia.

The New Zealand domestic dual-resident rules (dual-resident companies are unable to offset losses, maintain imputation accounts, and are denied deductions under the hybrid rules) may still apply. 

The ATO and Inland Revenue have agreed that companies can self-assess their residency as solely New Zealand or Australian, if certain criteria are met. The tax authorities published an administrative agreement to reflect the rules. Companies that do not qualify must apply to have their income tax treaty position confirmed through a (six-month) process. 

Read a June 2019 report prepared by the KPMG member firm in New Zealand that includes a checklist summary that can be used to verify if the agreement applies. 

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