Thousands of levy invoices were sent to to New Zealand tax residents who had declared foreign employment or service income in their tax return. File photo. Photo: RNZ / Angus Dreaver
ACC is chasing thousands of New Zealanders for levies on income they earned while working overseas.
The department said it had sent 4300 levy invoices for the 2023 tax year to New Zealand tax residents who had declared foreign employment or service income in their tax return.
These invoices can run into thousands of dollars.
It said ACC was generally charged on employment income taxable in New Zealand, which meant people who went overseas to work but retained tax residency might remain liable for ACC levies.
To give up tax residency, people generally need to be away from New Zealand for more than 325 days in a 12-month period and not have a permanent home in this country.
In general, there are double tax agreements with other countries that stop people having to pay tax twice, but that does not apply to ACC.
One New Zealander living in Australia posted online that they visited family in this country multiple times a year, so did not meet the 325-day rule and were being charged ACC levies at the self-employed rate.
"Whilst I have no problem contributing, it seems a joke that they are wanting levies from people who are outside of the country some who may have been out for years and no requirements for cover."
ACC said those people could end up eligible for ACC cover including weekly compensation.
It said the invoices sent to people with overseas income were less than 2 percent of total invoices for the period.
A similar number was expected to be sent for the year to March 2024.
It said, before the latest tax year, ACC did not automatically charge levies on foreign employment or services income, because Inland Revenue did not capture sufficient information to let ACC see what foreign income was leviable and what was not.
"Inland Revenue now provides ACC information that separates foreign employment and services income from non-leviable overseas earnings, such as pensions."
Tax expert Terry Baucher said he had encountered two of these cases and there seemed to be "anomalies" in the treatment of non-tax residents.
