Resident withholding income and tax

Resident withholding income includes interest and dividends. Generally, resident withholding tax (RWT) must be paid on it.

If you're a New Zealand tax resident earning income from interest and dividends from New Zealand bank accounts and investments, you will be liable for RWT unless you have a certificate of exemption from RWT, or an exempt status issued by Inland Revenue. Your bank or fund manager will deduct the tax before they pay you.

If you are liable for RWT, how much you pay depends on different factors such as the type of resident withholding income, your overall income, and whether you have supplied your IRD number to the interest payer.

If you pay more than $5,000 in business related interest per year, other than to a bank or normal lending institution, you should register with Inland Revenue as an RWT payer. You must deduct RWT at the time you pay interest to the recipient. Inland Revenue can charge significant penalties and interest on RWT deductions not made properly.

If you need to register as an interest payer or have a query about your tax liability, please contact us.