We are an Australian company and an employee has moved to NZ and become an IR56 payer. How do we account for the payments now. Is it still through STP with no tax taken out or is it a contractor with no ABN or something else?
Hey @IanS2
There are a few options for how this could or would take place, based on the agreement with the employee. As there is a tax treaty between New Zealand and Australia the employee is only taxed in one country.
If they are considered an employee, then you would be Reporting foreign employment income. You would need to look into the process of paying into the New Zealand tax system with Inland Revenue. How you would report this foreign employment income would then depend on whether you are using STP Phase 1 or STP Phase 2 reporting.
If you instead form a contract with them as a sole trader working in New Zealand. Then they would need to follow the New Zealand tax systems requirement and provide you with invoices for their service.
Please let us know if you need further information.
Hey @IanS2
There are a few options for how this could or would take place, based on the agreement with the employee. As there is a tax treaty between New Zealand and Australia the employee is only taxed in one country.
If they are considered an employee, then you would be Reporting foreign employment income. You would need to look into the process of paying into the New Zealand tax system with Inland Revenue. How you would report this foreign employment income would then depend on whether you are using STP Phase 1 or STP Phase 2 reporting.
If you instead form a contract with them as a sole trader working in New Zealand. Then they would need to follow the New Zealand tax systems requirement and provide you with invoices for their service.
Please let us know if you need further information.
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