Residence for short term assignees will be determined on the same basis as for other assignees. The residence tests were discussed earlier.

Where a secondment is for a short period (less than 92 days in total during the income year) then remuneration derived by a non-resident will generally be exempt from New Zealand tax, provided that the income is taxable in the home country/jurisdiction and the employer is not resident in New Zealand.

Relief from New Zealand taxation may also be provided under international double tax agreements to which New Zealand is a party. Such treaties generally exempt from New Zealand tax remuneration derived by a person who is present in New Zealand for less than 183 days during any 12-month period, provided that income is paid by an employer who is not a New Zealand resident or does not have a permanent establishment in New Zealand.

Withholding tax obligations in New Zealand would need to be considered. If an assignee carried work out in New Zealand, this will be sourced in New Zealand even if paid overseas.

If the taxpayer cannot determine that income is exempt under the 92-day rule or double tax agreement, then the employer may pay a bond to the Inland Revenue Department equal to the amount of tax deductions that would have been deducted.

If a short-term assignee is in New Zealand for more than 183 days, the assignee is taxable as resident on worldwide income basis, unless they meet the transitional resident rules (see previous). In contrast, a non-resident is taxable only on New Zealand sourced income.

Whether there is a risk that the assignment will create a Permanent Establishment for the overseas employer.