TAXES & OTHER PAYMENTS IN NEW ZEALAND
If you spend more than 183 days in New Zealand in a single year, you will be considered a resident and therefore required to pay tax for that year. However, if you are a new migrant, or a returning New Zealand citizen, you can apply for a temporary tax exemption, at which point (for tax purposes) you will become a transitional tax resident. To qualify for this exemption there are some strict requirements, but once granted it will allow tax exemption from income earned outside of New Zealand for up to 4 years. Any income earned within New Zealand during that time must be declared, however, and paid tax on. As an example, a state pension from another country can be effectively tax exempt for a total of 49 months.
The income tax rate for employees working in New Zealand is not affected by any deductibles whatsoever, and is usually collected at source from employers through the pay-as-you-earn (PAYE) system. There are, however, some tax credit allowances for certain situations such as childcare, donations and independent earners. The bottom rate of income tax is just 10.5% based on earnings up to $14,000 New Zealand dollars. The top rate of tax is 33%, which is payable to those who earn over $70,000 per year. In the 1980s New Zealand introduced a Goods and Services tax, which businesses and individuals must pay on products and services purchased in the country. The rate for most products and services is 15%. However, items that are exported to certain countries are not subjected to GST due to double taxation agreements with those countries. Financial services such as life insurance and banking are also not applicable to GST.
ESSENTIAL SKILLS IN DEMAND LISTS
New Zealand has had a points system for immigration requirements in place for a number of years now, which focuses on prioritising migrants who can fulfil the current skills shortages in the country. So, one of the first things you should do before you go any further in researching your potential future in New Zealand is to research the (regularly updated) Essential Skills in Demand (ESD) lists, to see if your current or chosen profession is in demand of in New Zealand. There are 3 ESD lists which the New Zealand Immigration Department publish for the marketing of job positions in the country.
Long-Term Skills Shortage List – The LTSSL details employment areas that are in high demand in New Zealand as well as the rest of the world and will continue to be so for the foreseeable future. Employment in one of these areas will grant a migrant with the potential to apply for a Work to Residence visa, ultimately leading to the possibility of applying for residency within New Zealand after 2 years, depending on other requirements. Jobs in health and social services heavily populate this list, along with positions in trade and engineering.
Immediate Skills Shortage List – The ISSL details all employment areas that are in high demand for the current moment in time due to current economic situations and development direction. Employment positions in this list facilitate the approval of temporary working visa applications. This is because normally a highly time-consuming labour market test must be carried out to determine whether there are any current New Zealand citizens or natives able to take up employment in that position, but with positions that are acknowledged as being in immediate need, this test is not utilised. While the application will be processed markedly faster, one disadvantage to this is that you may not be immediately eligible to apply for residency unlike jobs registered on the LTSS list. As with the long-term skills shortage list, employment roles in health and social services make up a large proportion of the positions on the list, along with positions in agriculture and forestry, oil and gas, and at the present time, roles in recreation, hospitality and tourism.
Canterbury Skills Shortage List – After the devastating earthquake in the Canterbury region of New Zealand and the following aftershocks, the New Zealand government has initiated a plan to increase the speed of recovery and rebuilding of the region by publishing a new ESD list to encourage immigration by migrants with skills of which there is a critical shortage in this geographical area. This list, called the Canterbury Skills Shortage List (CSSL), enables the facilitation of temporary work visas without the labour market check previously mentioned. If an occupation is listed on the Canterbury Skills Shortage List, as well as the Long Term Shortage List, then a migrant may be able to apply for residency in the future. As you would expect, the job roles in this list are made up purely based on the reconstruction and redevelopment of areas that were hit by the primary earthquake in 2010, and the subsequent aftershocks. Therefore the positions on this list are all based within the construction, engineering and trade sectors.
Employment positions mentioned in the LTSS, ISS and CSS Lists that are currently in high demand are either considered as such due to current skills shortages or due to a prediction of increased demand in the coming future. There are some employment areas, however, that are in high demand in New Zealand, just like they are all over the world, and will most likely continue to be so, to some extents, for the foreseeable future. These positions are often in the services sector, including healthcare and social services, engineering, and science. But a common sight now in skills shortage lists for many countries are positions in worldwide emerging markets such as ICT. Some of these positions have been on the skills shortage lists since they were first devised, with no current signs of being withdrawn.
WORKING VISAS FOR NEW ZEALAND
In order to be an employable migrant in New Zealand you must apply for a temporary or permanent visa before you arrive. Once you have arrived and are working in New Zealand, the visa can then be converted into a work permit. There are, generally speaking, 2 types of New Zealand work visas available to you, depending on your situation and your potential employment within the country. You can apply for a Work to Residence (WTR) visa, which is a temporary visa that can be used to apply for a residency permit in the future, or you can apply for an Essential Skills visa, which are granted for a maximum of 5 years but do not automatically lead to an application for permanent residence. The type of visa you can apply for depends greatly on your situation; whether you have a formal job offer, whether your qualifications and potential position are present on the LTSS list, whether your potential employer is accredited, and so on. The type of visa you apply for can be confusing.
Please contact us directly to advise the best migration path for you and your family.