Home > Our Publications > New Zealand Outlook > 2003 > November

WEALTHY migrants may soon get a tax break in New Zealand, but there will be no tax cuts for Kiwis in the next five to seven years, experts say.
Foreigners and returning New Zealanders who have been away at least 10 years might get a "tax holiday" on their overseas income when they return to New Zealand to work, Revenue Minister Michael Cullen said.
"The proposed tax holiday would generally benefit only the wealthy," accountant Brent Gilchrist said.
Other accountants said the tax break could help bring in possibly 20 wealthy individuals a year, with overseas investments of $50 million to $100 million each.
New Zealanders working overseas would generally spend most of their income. If they came back for good, they would tend to bring back their money to buy a home or invest here.
"It would only be a small number of people that would have reserves that they would be able to leave off-shore," Mr Gilchrist said.
PricewaterhouseCoopers senior partner John Shewan said the proposal was "significant". Tax had been a key problem for people who had lived overseas for a long time and for foreigners who had not lived in New Zealand before.
"We have a number of examples of very wealthy. people who get close to deciding to live in New Zealand - but when we explain the tax system they say, 'No thanks'," Mr Shewan said.
New Zealand was losing good people because of one of the "harshest tax regimes in the world", he said.
The change would result in perhaps 20 people a year moving to New Zealand, but they were typically "very wealthy", with $50 million to $100 million in assets overseas.
The provision would apply only to people who came to work as employees and only to income earned overseas.