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Inland Revenue

Tax Policy

Transitional residents – definition

Clause 176



PwC supports the clarification to the definition of transitional resident.

Further work is required, however, to identify and address other legislative anomalies with the current transitional residence rules.  In particular, greater clarity is still required over when taxpayers are eligible to access their transitional residence exemption period.


The policy intent for the transitional resident rules is to reduce tax barriers to international recruitment and to encourage New Zealanders who have lived overseas to return to New Zealand to live and work.  The tax relief granted is an exemption from income tax on certain foreign-sourced income during the period of relief.

The submission raises separate policy issues relating to the transitional resident rules.  The amendment in the bill is of a remedial and clarifying nature only and is not intended to change the effect of the transitional resident rules.


That the submission be declined.