Non-resident taxpayers pay tax on interest, royalties and dividends from New Zealand bank accounts and other investments. This is called Non-Resident Withholding Tax (NRWT).
Your payer (bank or fund manager) deducts tax from your interest or dividend payment before they pay you.
How much tax do I pay?
The amount you pay depends on your home country and the type of investment.
- For dividends and unit trust distributions, tax rates depend on the double tax agreement (DTA) between New Zealand and your home country.
- For bank accounts and term deposits, the tax you pay depends on the DTA or whether the investment is taxed under NRWT or an Approved Issuer Levy (AIL).
What do I need to do?
When you open an account or investment in New Zealand, you need to tell your payer your home country.
Let your payer know if your home country changes.
- If New Zealand has a double tax agreement (DTA) with your home country, you will probably pay 10% or 15% tax. Check your DTA.
- If there is no DTA you pay 30% tax on dividends and 15% tax on interest and royalties.
- You might be able to claim tax credits in your home country for the tax you paid in New Zealand. Check your DTA.
- Some New Zealand borrowers may be approved to pay Approved Issuer Levy (AIL). This means they won’t need to deduct NRWT from any interest to pay you.
- Check if your payer offers this type of investment.
At the end of the New Zealand tax year
You need to file a tax return in New Zealand if the income you received from your New Zealand investments:
- has not been taxed, or
- has been taxed at the wrong rate.
You’ll need a tax certificate from your payer. In some situations, they will send it to you after 31 March. You might have to request one or get it from your online banking account.