Do I Owe Tax on My NZ Investment?

Mostly no — and this is the most common misunderstanding on this page's topic. A US-listed ETF like VOO or VXUS is a FIF interest regardless of what it holds underneath, so its NZ tax outcome is set by the deemed 5% Fair Dividend Rate (or the comparative-value result if lower), not by whether the fund actually made a capital gain. Being an "index fund" or "ETF" doesn't change this — only two things do:

• Staying under the $50,000 total cost de minimis, so FIF doesn't apply to that holding at all (dividends are still taxable) — see the FIF de minimis and ASX exemption rules.
• Holding an exempt ASX-listed Australian operating company (CBA, BHP, CSL and similar) rather than an ETF — the section EX 31 exemption applies to Australian-resident companies, not to fund vehicles, so ASX-listed ETFs (VAS, A200, IVV, NDQ) do not qualify.

A NZ-domiciled PIE fund investing in international shares (many locally-marketed "international shares" or "world" funds are structured this way) sidesteps the issue differently: the PIE itself is the FIF investor, not you, so the fund handles FIF at the fund level and you're taxed only on your share of the PIE's reported income, at your capped 28% PIR. That changes which mechanism applies to you — final PIR tax instead of FIF-plus-marginal-rate — but it is not a capital-gains exemption: the underlying holdings are still subject to FIF inside the fund.

Whether a loss reduces your tax bill depends on which regime the investment sits in — the naive assumption ("a loss is a loss, it offsets my income") is wrong for two of the three cases below.

• NZ shares: if you held them as a long-term investor, a loss on sale is not deductible — the mirror image of a gain not being taxed. If you bought with the intention of resale for profit (the same intention test that makes a gain taxable), the shares are revenue account property and a loss is deductible in the ordinary way.
• Foreign shares/ETFs under FIF: using the comparative value method, if your total result across ordinary FIF holdings for the year would be negative, the law reduces it to $0 rather than letting it become a deductible loss (Income Tax Act 2007 s EX 51(7)-(8)) — a bad year doesn't produce a refund, but it also doesn't create extra tax. The Fair Dividend Rate method can't produce a loss at all, since it's always a percentage of a positive opening value; this asymmetry is why the FDR-vs-CV choice matters most in down years — see the FDR vs CV comparison.
• Bright-line property: a loss on a bright-line-taxable sale is ring-fenced (s EL 20) — it can only offset gains from other land sales in the same year or be carried forward to a later year with land-sale income. It can never be deducted against salary, wages, or other income.

For interest reported to IRD via Resident Withholding Tax — bank accounts, term deposits — income from a joint account is split equally between account holders who have each given the payer a valid IRD number by default. If the real ownership isn't 50/50 (for example, one partner contributed most of the deposit), either holder can update their own share in myIR, backdated to when the change actually took effect, so the income is taxed to whoever it actually belongs to rather than split evenly. This matters most when partners are on different marginal or RWT rates, since it changes who pays tax at which rate on the same interest — not the total tax base itself.