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Income Tax Act 2007

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

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

You could also call this:

“Agents and trustees must withhold tax for certain dividends”

When an agent or trustee has to withhold RWT (Resident Withholding Tax) from certain dividends, there are special rules they need to follow.

If the income is a dividend that isn’t treated as interest, the amount of tax that must be withheld is treated as if the RWT rules apply to it. You can find more information about this in section RE 3.

For non-cash dividends, the trustee or agent must pay the tax commissioner an amount equal to the tax for the dividend. This is treated as if it were the amount of tax that needs to be withheld and paid under the RWT rules.

It’s important to know that these rules don’t change the responsibility of the person who pays the income to the agent or trustee. They still need to withhold RWT for the payment as explained in section RE 4.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1520218.

Topics:

Money and consumer rights > Taxes

RE 8: When resident passive income paid to nominees, or

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

RE 10: Special rule relating to payments of interest, or

“When to deduct tax from interest payments over $5,000”

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

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

This section applies when an agent or trustee is required to withhold RWT from certain dividends.
To the extent to which the resident passive income consists of a dividend other than a dividend treated as interest, an amount of tax that must be withheld under section RE 3 is treated as an amount to which the RWT rules apply.
To the extent to which the resident passive income consists of a non-cash dividend, the trustee or agent must pay to the Commissioner an amount equal to the amount of tax for the dividend as if it were the amount of tax required to be withheld and paid under the RWT rules.
This section does not override the obligation of the person who pays the resident passive income to the agent or trustee to withhold RWT for the payment under section RE 4.

Compare

2004 No 35 s NF 3(3)–(5)

Notes

Section RE 9(2): substituted (with effect on 30 June 2009), on 6 October 2009, by section 528(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section RE 9 list of defined terms FDP rules: repealed (with effect on 30 June 2009), on 6 October 2009, by section 528(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).