Glossary
What is FIF (Foreign Investment Fund) tax in NZ?
Updated Reviewed quarterly
FIF stands for Foreign Investment Fund — the NZ tax regime that applies to overseas-share holdings above NZ$50,000 cost-basis (the de minimis threshold). Under FIF you pay tax on a deemed return (typically 5% of opening market value under the Fair Dividend Rate method) regardless of actual gains. US dividend withholding tax (15% under the NZ-US treaty) applies on top.
FIF affects most direct holdings of US ETFs (SPY, VOO, QQQ, SCHD, JEPI, etc.) once your overseas-share portfolio exceeds NZ$50K cost-basis. The NZ-domiciled PIE alternatives — Smartshares USF (S&P 500), Kernel S&P 500, Smartshares ESG (global sustainable), etc. — avoid FIF entirely because they're NZ-resident funds for tax purposes. For any FIF question, talk to a registered tax adviser; this page is general information only.
Where you’ll see this term
- Deeper dive: FIF explained — IR461, FDR + CV methods, IR3 filing, worked NZ$ examples
- FDR vs Comparative Value method
- NZ$50,000 de minimis (deep)
- De minimis — quick definition
- PIE fund — the FIF-free alternative
- NZ-listed ETFs (no FIF)