Do NZ sole traders pay tax on overseas income?

New Zealand taxes its residents on their worldwide income — meaning if you are a New Zealand tax resident, you must pay NZ income tax on income earned anywhere in the world, not just within New Zealand. **NZ tax residency:** You are a NZ tax resident if you have a permanent place of abode in NZ, or if you have been in NZ for more than 183 days in any 12-month period. **Overseas income for sole traders:** - If you work for overseas clients from New Zealand, the income is NZ-taxable - If you work abroad temporarily while still a NZ tax resident, the income is also taxable - You must declare overseas income on your IR3 and may need to include foreign income details (IR3B) **Double tax agreements (DTAs):** NZ has DTAs with many countries (including Australia, UK, USA, Canada). These prevent you from being taxed twice on the same income. If you paid tax overseas, you can claim a foreign tax credit on your NZ return. **GST on overseas services:** If you provide services to overseas clients, those services are generally zero-rated for GST (you charge 0% GST). This means no GST on the invoice but you can still claim input tax credits on your NZ business expenses.

• NZ tax residents pay tax on worldwide income
• Overseas client work from NZ is NZ-taxable
• Double tax agreements prevent double taxation
• Foreign tax credits available for overseas tax paid
• Services to overseas clients: zero-rated for GST (0%)