6.1 How to check if you are required to pay tax in New Zealand?
If you meet either of the following two conditions, there is no need to file your income from overseas Futures and Options markets in New Zealand.
- You are a non-resident taxpayer in New Zealand (See 2.1); or
- You are entitled to a 4-year temporary tax exemption (See 2.5).
If neither of above conditions can be met, you’ll need to work out if your transactions in overseas Futures and Options markets would be taxable as follows:
- You originally bought it for resale or profit-making instead of long-term investment; or
- You are in a business of dealing in futures and options; or
- You have a pattern of buying and selling of futures and options; or
- You are classified as a "trader" in Futures and options (See 2.2.1)
If your transactions in overseas Futures and Options markets would be taxable, you’ll need to pay tax on any gains.
It’s likely that you’re a “trader” in Futures and options if you:
- have a high number of transactions
- spend a lot of time and effort managing your shares portfolio
- work on your Futures and options portfolio on a fairly continuous basis.
There is no exact number of trades or frequency of your transactions to classify if you are a trader.
You may need to consider the reasons for your transactions or whether your activity is organised and systematic.
If you are unsure if you’re a “trader”, please consult with your tax consultant or the IRD.
Disclaimer: The content of this page is for educational purposes only. It is designed to help you understand the potential tax obligations that may apply to you when investing in financial products. Tiger Broker does not provide any advice, including tax advice, and is not responsible for providing any guidance, opinions, or suggestions about tax for you. If you have any questions about your personal circumstances and tax obligation, we suggest you contact your tax advisor directly for more information.