The downside of the foreign-income tax exemption is that you aren't entitled to claim any NZ tax credits or family assistance while taking advantage of the exemption.
My accountant reckons that it's worth taking the exemption in the first year in NZ because you can't claim tax credits anyway. After that, you'll need to work out whether your Kiwi income + foreign income would push you over the tax credit threshold. If it does, it's probably worth keeping the exemption for the full four years. If it doesn't, it might be worth waiving the exemption. You're allowed to relinquish the exemption, but you can't opt back in. Once you're out, you're out.
From memory, I think there's a box to tick on the IRD number application form.
And the tax credit thresholds are quite low.
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