NZ tax · Reviewed 2026-05-02
Foreign Investment Fund (FIF) — the basics.
The NZ regime for taxing foreign equity holdings — including SPY, VOO, QQQ and other US-listed ETFs Kiwis hold via Hatch, Stake, Sharesies or Interactive Brokers. Kicks in at NZ$50,000 cost base; calculation method matters more than most people realise.
Direct answer · What is the NZ FIF threshold?
What is FIF?
FIF is shorthand for the NZ Foreign Investment Fund regime. Its purpose: stop NZ residents from indefinitely deferring tax by holding income-producing assets offshore. Instead of waiting for the foreign asset to actually pay you a dividend, FIF deems an annual taxable income — calculated under one of five methods[1][2].
For ETF investors specifically, the practical reality is simpler than the legislation suggests. Most NZ retail investors holding US-listed ETFs use the FDR (Fair Dividend Rate) method, which deems 5% of the opening market value as taxable income, regardless of actual dividends or capital gains.
When FIF applies
The NZ$50,000 (source) threshold
FIF applies to NZ-tax-resident individuals once the total cost base of qualifying foreign investments exceeds NZ$50,000 (source) at any point during the tax year[2].
- Cost base means what you paid, in NZD, at the time of purchase — not the current market value.
- The threshold is per individual, not per couple. Joint accounts can split the cost base — see de minimis explained.
- NZ-domiciled PIE funds (Smartshares, Kernel) are excluded from the FIF cost base, even if they hold US shares internally.
- ASX-listed Australian-resident-listed companies are exempt under the Australian-shares carve-out.
FIF calculation methods
Five methods · two that matter for ETF holders
IRD lists five FIF methods[1]: Fair Dividend Rate (FDR), Comparative Value (CV), Cost, Deemed Rate of Return, and Attributable FIF Income. For an individual NZ retail ETF investor, only two are practically available — FDR (the default) and CV (an annual election that can be cheaper in down years).
Compare the two side-by-side at FDR vs Comparative Value — the choice can swing your tax bill several thousand dollars in a flat or negative year.
Sources
- [1]IR461 — Foreign investment funds (full guide) — Inland Revenue (NZ) (2026)
- [2]FIF — overview — Inland Revenue (NZ) (2026)
- [3]IR3 individual income tax return — Inland Revenue (NZ) (2026)
Continue with
FDR vs Comparative Value method
Choose the right FIF method — worked example with NZ$ figures.
NZ$50,000 de minimis exemption
How the threshold works — and the joint-filing trap.
PIE vs FIF
Why a PIE wrapper can be cheaper than a US-listed ETF for high earners.
US withholding + W-8BEN
Drop US dividend withholding from 30% to 15%.
FAQ
What is the FIF threshold in New Zealand?⌄
The NZ Foreign Investment Fund (FIF) de minimis threshold is NZ$50,000 of total cost basis across all foreign-listed equity holdings. Below this threshold, FIF rules do not apply and you declare actual dividends received. Above it, FIF income is deemed annually under one of the FIF methods (most NZ retail investors use the Fair Dividend Rate, deeming 5% of opening market value as taxable income).
How much is the FIF de minimis threshold in NZ?⌄
NZ$50,000 of cost basis per individual NZ tax resident. The threshold is tested at any point during the tax year — even a single day above NZ$50,000 triggers FIF for the whole year. Cost basis is calculated in NZD at the date of purchase, plus brokerage and FX cost. NZ-domiciled PIE funds (Smartshares, Kernel) do not count toward the threshold.
How do I file FIF tax on my NZ tax return?⌄
FIF income is declared on the IR3 individual tax return at item 22 (overseas income). The amount is your calculated FIF income under either the Fair Dividend Rate (FDR — 5% × opening market value × marginal rate) or Comparative Value (CV — actual gain plus dividends). Most NZ broker tax reports compute both methods so you can pick the lower. The choice is annual and per-fund within the rules in IR461.
Do I have to file FIF income on my IR3?⌄
If your foreign-investment cost base is over NZ$50,000 and none of the FIF exemptions apply, yes — FIF income goes on your IR3 individual return. The amount is calculated under one of the FIF methods (most NZ retail investors use FDR). If you are under NZ$50,000 the de minimis exemption applies and you instead declare actual dividends received.
Does FIF only apply to ETFs?⌄
No. FIF applies to most foreign equity holdings — direct US shares, foreign-domiciled mutual funds, foreign ETFs (SPY / VOO / QQQ etc.), and many foreign superannuation schemes. NZ-domiciled PIE funds are explicitly excluded. ASX-listed Australian shares have a separate exemption for Australian-resident-listed companies.
How do I find the cost base of my foreign investments?⌄
Cost base is what you paid (in NZD at the time of purchase), plus brokerage and FX cost. Most NZ-investor platforms (Hatch, Stake, Sharesies, Interactive Brokers) provide an annual tax report that consolidates this. Cross-check with your own purchase records — platform reports occasionally miss off-platform transfers in.
