Explanatory note

This note is not part of the regulations, but is intended to indicate their general effect.

These regulations, which come into force on 1 December 2003, amend the Income Tax (Withholding Payments) Regulations 1979.

Currently, regulation 4 of those regulations contains an exemption under which non-resident contractors who are exempt from tax in New Zealand under a double taxation agreement are exempt from non-resident contractors' withholding tax if they are present in New Zealand for less than 62 days in any 12-month period. These regulations extend this period to 92 days or less in any 12-month period and clarify that the non-resident contractor must be eligible for total relief from tax under a double taxation agreement.

These regulations also add another exemption under which non-resident contractors are exempt from non-resident contractors' withholding tax if, in relation to the contract activities of the non-resident contractor, the total amount of contract payments made is $15,000 or less in any period of 12 months.