If you pay dividends, interest or royalties to New Zealand residents, these are known as resident passive income. If you make payments that are resident passive income you will need to:
- register as a payer
- deduct resident withholding tax (RWT) from these payments, and
- send the deductions to us.
Some people or organisations may have a RWT exemption when:
- income is exempt from tax, including RWT, under New Zealand tax law
- income is exempt from tax because of any other New Zealand legislation
- double tax agreements allow for an exemption from tax on certain types of income.
Do not deduct RWT from someone who presents you with current certificate of exemption.
Investment income reporting
If you are a payer of investment income, you must send us information about who you pay. This helps us make sure people are paying the right amount of tax, and receiving the correct entitlements.
The reporting requirements for investment income are changing. Payers of investment income can keep using the existing rules until 1 April 2020. All businesses and organisations will need to follow the new rules from that date.