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LB 5: Tax credits for non-resident withholding tax
or “Getting tax credits for income taxed outside New Zealand”
You could also call this:

“Tax credits for retirement scheme contributions”

This part of the law talks about tax credits for something called RSCT, which stands for Retirement Scheme Contribution Tax. Here’s what you need to know:

You can get a tax credit if you receive money as a retirement scheme contribution in a year. This applies when someone puts money into your retirement savings and pays RSCT on that contribution. However, this doesn’t work if the money you receive is already exempt from tax under section CX 50B.

If you live in New Zealand, you can get a tax credit equal to the amount of RSCT that was taken out of the contribution.

If you don’t live in New Zealand, you can still get a tax credit. It will be the difference between the RSCT taken out and any non-resident withholding tax (NRWT) paid on the contribution.

There’s a special rule for non-residents who get a retirement scheme contribution that is a taxable Maori authority distribution. In this case, you can get a tax credit equal to the full amount of RSCT taken out.

The tax credit applies to the tax year that matches the year you received the retirement scheme contribution.

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Next up: LB 6B: Tax credits for RLWT

or “Getting a tax credit for RLWT paid when selling residential land”
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Part L Tax credits and other credits
Tax credits for payments, deductions, and family payments

LB 6Tax credits for RSCT

  1. This section applies when—

  2. a person derives income as a retirement scheme contribution in an income year; and
    1. the retirement scheme contributor pays RSCT for the contribution; and
      1. the income is not excluded income of the person under section CX 50B (Contributions to retirement savings schemes).

        1. If the person is resident in New Zealand, they have a tax credit for the tax year corresponding to the income year of an amount equal to the RSCT withheld.

        2. If the person is not resident in New Zealand, they have a tax credit for the tax year corresponding to the income year of an amount equal to the excess of RSCT withheld over NRWT paid in relation to the contribution.

        3. If the person is not resident in New Zealand and the retirement scheme contribution is a taxable Maori authority distribution, they have a tax credit for the tax year corresponding to the income year of an amount equal to the RSCT withheld.

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        Notes
        • Section LB 6: substituted, on , by section 438(1) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).