Income Tax Act 2007

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

RE 18: Payments made by RWT proxies

You could also call this:

"Tax withheld from dividends by RWT proxies"

You pay resident passive income that includes a dividend. A person who is an RWT proxy for you must withhold some tax. They calculate the tax using a formula that includes the tax rate and the amount paid. You need to know what the tax rate is. The tax rate is the basic rate set out in the schedule 1. The amount paid is the amount of the dividend paid. The tax rate is used in a formula to work out the tax. The formula is: tax rate times amount paid, divided by 1 minus the tax rate. This formula helps work out how much tax to withhold.

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This page was last updated on 29 January 2026 — View changes

Topics:

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

RE 18Payments made by RWT proxies

A person who is an RWT proxy for a person paying resident passive income that consists of a dividend must withhold an amount of tax for the payment calculated using the formula—
$tax rate × amount paid ÷ (1 − tax rate).$

Where:
In the formula,—
tax rate is the basic rate set out in schedule 1, part D, clause 3 (Basic tax rates: income tax, ESCT, RSCT, RWT, and attributed fringe benefits):
amount paid is the amount of the dividend paid.

Compare

2004 No 35 s NF 2(1B)

Notes

Section RE 18(2)(a) tax rate: amended (with effect on 1 April 2008), on 7 September 2010 (applying for the 2008–09 and later income years), by section 116(1) of the Taxation (Annual Rates, Trans-Tasman Savings Portability, KiwiSaver, and Remedial Matters) Act 2010 (2010 No 109).
Section RE 18(2)(a) tax rate: amended, on 1 April 2008, by section 562 of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).