New Zealand’s Accident Compensation Corporation (ACC) has issued 4,300 levy invoices for the 2023 tax year to New Zealand tax residents who reported foreign employment or service income on their tax returns.
ACC clarified that levies are typically applied to employment income that is taxable in New Zealand. Individuals who work overseas but maintain their tax residency may still be responsible for ACC levies.
To relinquish tax residency, individuals usually need to be outside of New Zealand for more than 325 days within a 12-month period and must not have a permanent home in the country.
The situation has sparked significant backlash among New Zealanders overseas, with many expressing frustration and confusion over why they are being billed for a service they do not use. Some have described the situation as absurd or a “joke.”
The ACC clarified that individuals who are charged these levies may still be eligible for ACC coverage, including weekly compensation. They also mentioned that the invoices sent to those with overseas income represent less than 2% of total invoices issued during the period.
Previously, ACC did not automatically charge levies on foreign income due to insufficient information from Inland Revenue. However, recent improvements now allow ACC to differentiate between leviable foreign earnings and non-leviable income, such as pensions.