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Income Tax Act 2007

General collection rules - Withholding tax on resident passive income (RWT)

RE 8: When resident passive income paid to nominees

You could also call this:

“Rules for receiving income on someone else's behalf”

This law is about what happens when someone receives money on behalf of someone else. It applies when you (let’s call you person A) get money for another person (we’ll call them person B). Some or all of this money is what’s called ‘resident passive income’.

The law says that if you (person A) either have something called ‘RWT-exempt status’ or if you get this money as part of your business, you need to do something special. You must take out some of the money (called RWT) and pay it to the government (the Commissioner).

You need to do this for any part of the payment that hasn’t already had RWT taken out. This is your job to do when you get the money.

There’s another rule, though, in section RE 9, which can change this. If that section applies, you follow what it says instead of this rule.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1520214.

Topics:
Money and consumer rights > Taxes
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RE 7: When resident passive income paid to trustees, or

“Rules for trustees receiving passive income on behalf of others”

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RE 9: Agents’ or trustees’ obligations in relation to certain dividends, or

“Agents and trustees must withhold tax for certain dividends”

Part R General collection rules
Withholding tax on resident passive income (RWT)

RE 8When resident passive income paid to nominees

  1. This section applies when—

  2. an amount is paid to a person (person A) who is a nominee for another person (person B) at the time; and
    1. some or all of the amount is resident passive income; and
      1. person A—
        1. has RWT-exempt status under section RE 27 at the time of the payment; or
          1. is paid the amount in the conduct of a taxable activity carried on by them.

          2. At the time the payment is received and to the extent to which it has not already been withheld, person A must withhold RWT for the payment and pay it to the Commissioner.

          3. Section RE 9 overrides this section.

          Compare
          Notes
          • Section RE 8(1)(c)(i): amended, on , by section 222(1) of the Taxation (Annual Rates for 2017–18, Employment and Investment Income, and Remedial Matters) Act 2018 (2018 No 5).
          • Section RE 8 list of defined terms RWT-exempt status: inserted, on , by section 222(2)(a) of the Taxation (Annual Rates for 2017–18, Employment and Investment Income, and Remedial Matters) Act 2018 (2018 No 5).
          • Section RE 8 list of defined terms RWT exemption certificate: repealed, on , by section 222(2)(b) of the Taxation (Annual Rates for 2017–18, Employment and Investment Income, and Remedial Matters) Act 2018 (2018 No 5).