If you own a company in New Zealand, you need to know about some rules for paying money to people who don't live in the country. These rules are about dividends, which are a share of the company's profits.
Your company becomes an agent for people who don't live in New Zealand (called absentees) when you pay them dividends. This happens if they own shares in your company or if they have a special kind of loan called a debenture.
There's another rule that can change how some debentures are treated. You can find more information about this in section FA 2.
It's important to know that there are some exceptions to these rules. You can find these exceptions in section RF 2(3) and (4). These exceptions are about something called "non-resident passive income" and they take priority over the rules we just talked about.
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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1517436.
A company incorporated in New Zealand is an agent of an absentee to whom it pays or credits dividends as a shareholder, or as a holder of a debenture to which section FA 2 (Recharacterisation of certain debentures) applies.
Section RF 2(3) and (4) (Non-resident passive income) overrides this section.
