Non-Resident Contractors’ Tax Modernisation

What is non-resident contractors’ tax (NRCT)?

NRCT is a withholding tax deducted from payments made to non-resident contractors for work performed in New Zealand.
It is collected through the PAYE system.
The purpose of NRCT is to ensure tax is collected before a non-resident contractor leaves New Zealand.
NRCT is deducted from the gross payment made to the contractor.
The contractor can later file a New Zealand tax return to calculate their actual tax liability.
Any excess NRCT deducted can be refunded after the tax return is assessed.

Increasing the monetary exemption threshold
- Increase from $15,000 to $75,000
Implementing a “single payer” view:
- New Zealand entities only need to consider their own contractual activities in a 12-month period when determining threshold exemptions applications if thy engage with a non-resident contractor.
Excluding low-risk entities from NRCT
- Limited partnerships, representative offices and branches will be excluded from NRCT if appropriate steps of tax compliance have been shown.
Improving NRCT administration
- Creating a tax code of bespoke NRCT for New Zealand payers to use the PAYE system.
Changes would apply from 1 April 2027