Mr's quick answer
A business active in both countries deals with two tax offices (the ATO and IRD), two income years (30 June and, usually, 31 March), two GST systems (10% and 15%) and two sets of payroll rules. The Australia–New Zealand double tax agreement, in force since 19 March 2010, helps stop the same income being taxed twice. The details depend on residency and structure, so owners need advice from someone who works across both systems.
Key points
- Two tax offices: the ATO in Australia and Inland Revenue in New Zealand.
- Two year-ends: 30 June in Australia; 31 March is New Zealand's standard balance date.
- Double tax agreement signed 26 June 2009, in force 19 March 2010.
- GST at 10% and 15%, with separate registration thresholds and returns.
- Lenders on each side read your local tax position first, so keep both up to date.
- Tax offices
- ATO (AU) / IRD (NZ)
- Year-ends
- 30 June (AU) / 31 March standard (NZ)
- Double tax agreement
- In force 19 March 2010
- GST
- 10% (AU) / 15% (NZ)
Mr isn’t a tax adviser (he’s a cartoon in a bowler hat), but he’s sat beside plenty of trans-Tasman owners as they worked out what they’d signed up for. This page isn’t advice for your situation. It’s the map: the big pieces of the two systems, how they fit together, and the questions worth taking to your accountant.
What are the moving parts?
| Australia | New Zealand | |
|---|---|---|
| Tax office | Australian Taxation Office (ATO) | Inland Revenue (IRD) |
| Business identifier | ABN (and ACN for companies) | NZBN (and company number) |
| Income year | 1 July to 30 June | Standard balance date 31 March |
| Income tax during the year | PAYG instalments | Provisional tax |
| GST | 10%, register at $75,000 | 15%, register at $60,000 |
| Retirement savings for staff | Super guarantee 12% | KiwiSaver employer minimum 3.5% |
| Tax debt arrangements | Payment plans | Instalment arrangements |
Each of these has its own side-by-side page on this site. This page is about how they interact when one business, or one owner, touches both.
What does the double tax agreement do?
IRD’s tax policy site records that the current Australia–New Zealand double tax agreement was signed on 26 June 2009 and came into force on 19 March 2010. It replaced an earlier 1995 agreement. Broadly, a double tax agreement sets out which country gets to tax which kinds of income, and how one country gives relief for tax paid in the other, so the same income isn’t fully taxed twice.
For owners, the practical points are:
- Residency matters. Where you (and your companies) are tax resident shapes which country taxes what.
- Where the business is carried on matters. A permanent presence in the other country can bring that country’s tax into play.
- Documentation matters. Claiming relief usually means showing what you paid and where.
This is exactly the area where general information runs out and advice begins. Take your structure diagram to an adviser who works across both systems.
How do two year-ends change your planning?
If you have an Australian entity and a New Zealand entity, you’ll usually have a 30 June year-end and a 31 March year-end. That means:
- two sets of annual accounts, three months apart;
- two return seasons, and two rounds of instalments (PAYG instalments and provisional tax) on different calendars;
- GST on different cycles: quarterly BAS in Australia; monthly, two-monthly or six-monthly returns in New Zealand.
It’s busier rather than harder. Our guide to planning for two year-ends and the side-by-side tax due dates make it manageable.
Tax bills from two countries landing close together? Mr’s people look at tax-time funding case by case on each side, and asking won’t touch your credit file. Choose your country and start a 60-second enquiry.
What should you ask your adviser?
Mr’s starter list for a trans-Tasman owner’s first meeting:
- Where am I tax resident now, and could a move change that?
- Where is each of my entities tax resident?
- Do I have a permanent presence in the other country?
- Which country taxes the profits from my cross-border sales?
- How do the double tax agreement’s rules apply to my income?
- Should my New Zealand activity sit in a separate company?
- What GST registrations do I need in each country?
- What are my payroll obligations for staff in each country?
- Are there any withholding taxes on payments between my entities?
- How do I keep records so relief can be claimed if needed?
How do lenders view a trans-Tasman tax picture?
Lenders in each country start with the borrowing entity’s local tax position: is it lodged, is it paid, is there an arrangement? But if the borrower is part of a trans-Tasman group, or the owner has obligations in the other country, they’ll often ask about the whole picture. An overdue debt with the other country’s tax office can still worry a lender, especially if it could pull cash out of the business.
The calm approach:
- keep both countries’ lodgements current;
- use formal payment plans or instalment arrangements if you fall behind;
- prepare a one-page summary of each entity’s tax position;
- tell the lender upfront about anything outstanding.
Tax debt is considered case by case on both sides. The single-country sites go deeper: the Australian site on how loan interest is treated for tax, and the New Zealand site on whether lenders need your tax returns filed.
Illustrative example
Illustrative only. A Canberra-based events company runs a New Zealand subsidiary that stages shows in Auckland and Wellington. Its Australian parent has a 30 June year-end; the subsidiary uses a 31 March balance date. The group’s accountant works with a New Zealand partner firm, maps which profits are taxed where under the double tax agreement, and sets up a combined calendar. When the subsidiary later looks for funding for a big summer season, it can show a clean New Zealand tax record and a tidy group summary.
When you’re ready to talk funding
Two tax systems sound daunting, yet trans-Tasman owners handle them every day with good advice and a shared calendar. When funding is on your mind, start with a short enquiry: it involves no credit check, it isn’t forwarded around a line of lenders, and someone who knows your country reads the full picture. Describe your tax position in each country accurately on the form, and you’ll be matched properly. See if you qualify on your side of the Tasman.
Frequently asked questions
Will I pay tax twice if my business earns income in both countries?
The double tax agreement between Australia and New Zealand is designed to prevent that, by setting out which country can tax which income and how credits work. The outcome depends on your residency, your structure and the type of income, so get advice that covers both countries.
Do I need an accountant in each country?
Not necessarily, but you need advice that covers both systems. Some firms work across the Tasman; others partner with a firm on the other side. What matters is that someone is looking at the whole picture, not just one country's returns.
Which country's tax year should my group use?
Each entity follows its own country's rules. Australian entities generally use the 1 July to 30 June income year. New Zealand's standard balance date is 31 March, though some businesses have a different approved balance date. Groups often end up with two year-ends and plan for both.
Do lenders care about tax in the other country?
They focus on the borrowing entity's own country first, but they will ask about group-wide obligations if the business is connected across the Tasman. An overdue tax debt in either country can affect the overall picture, so keep both current or under an arrangement.