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Income Tax Act 2007

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

RE 11: Notification by companies

You could also call this:

“Companies must notify payers about their status to ensure correct tax deduction”

If you’re a company (but not a Maori authority) and you’re going to get money that’s called resident passive income (but not a replacement payment under a share-lending arrangement), you need to tell the person paying you that you’re a company.

When you tell them you’re a company, they have to take out some money for tax. This is called RWT. They’ll take out the right amount based on the rates in schedule 1, part D, clause 4.

If you don’t tell them you’re a company, they’ll have to take out more tax. They’ll use a higher rate that’s mentioned in section RE 19(3).

It’s important to let people know you’re a company when they’re paying you, so they can take out the right amount of tax.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1520222.

Topics:
Money and consumer rights > Taxes
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Part R General collection rules
Withholding tax on resident passive income (RWT)

RE 11Notification by companies

  1. This section applies when a company that is not a Maori authority is entitled to receive a payment of resident passive income other than a replacement payment under a share-lending arrangement.

  2. The company must notify the person making the payment that they are a company.

  3. The person making the payment must withhold RWT for the payment at the relevant rate set out in schedule 1, part D, clause 4 (Basic tax rates: income tax, ESCT, RSCT, RWT, and attributed fringe benefits) for a payment made on or after the date of notification.

  4. If the company does not notify the person making the payment, the person must apply the higher withholding rate set out in section RE 19(3).

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Notes
  • Section RE 11(1): amended, on , by section 258 of the Taxation (Annual Rates for 2017–18, Employment and Investment Income, and Remedial Matters) Act 2018 (2018 No 5).
  • Section RE 11(3): amended (with effect on 1 April 2008), on , by section 529(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
  • Section RE 11(3): amended, on , by section 562 of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
  • Section RE 11 list of defined terms trustee: repealed, on , by section 258 of the Taxation (Annual Rates for 2017–18, Employment and Investment Income, and Remedial Matters) Act 2018 (2018 No 5).