Changed rule less taxing

The Government has simplified the tax rules for hundreds of people each year who work in New Zealand on short-term contracts, the Associate Revenue Minister Paul Swain announced yesterday.

He said short-term contractors would no longer have to seek an exemption from the Inland Revenue, a requirement that increased costs for both employers and the contractors.

Mr Swain said payments to non-resident contractors were currently subject to a 15 per cent withholding tax.

Even if the person came from a country that New Zealand had a double tax agreement with that exempted short-term contractors from paying tax here, they or their employer still had to apply for a tax exemption under the present rules.

But from the beginning of next month contractors who worked in New Zealand for less than 62 days in a 12-month period and came from a country the Government had a double tax agreement with, would no longer need to obtain an exemption certificate.

Mr Swain said this would save time and bother for an estimated 500 short-term contractors a year and those who employed them.

New Zealand has double tax agreements with 26 countries.

- NZPA