Plain language law

New Zealand law explained for everyone

Income Tax Act 2007

Taxation of certain entities - Agents

HD 22: Banking companies

You could also call this:

“Rules for businesses paying interest on deposits from non-residents”

If you receive or hold money as a deposit for someone who doesn’t live in New Zealand, and you pay them interest on that money, you are treated as an agent. This applies to people, banking companies, other companies, local authorities, and public authorities who do this as part of their business activities.

This rule only applies if the interest you pay on the deposit is more than $100.

However, there’s another part of the law that can override this rule. It’s called Section RF 2(3) and (4), and it talks about “Non-resident passive income”. If that section applies, it takes priority over this one.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1517438.

Topics:
Money and consumer rights > Taxes
Money and consumer rights > Banking and loans
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“Trustees handle tax duties for overseas investors in group funds”

Part H Taxation of certain entities
Agents

HD 22Banking companies

  1. A person, including a banking or other company, or a local authority or public authority, is treated as an agent if in the course of their business activities, they receive or hold money as a deposit and pay interest to an absentee on the money deposited by the absentee.

  2. This section applies only if the interest paid on the deposit is more than $100.

  3. Section RF 2(3) and (4) (Non-resident passive income) overrides this section.

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