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Income Tax Act 2007

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

RE 19: Choosing other rates

You could also call this:

“Choosing a different tax rate for your passive income”

When you receive passive income as a resident, you can choose different tax rates. You can tell the person who is paying you to use one of the rates from schedule 1, part D, clause 3. This applies to all types of passive income except for replacement payments under share-lending arrangements.

If you’re a company, you have a special option. You can ask the person paying you to use the rate from schedule 1, part D, clause 4 instead.

Once you tell the person paying you which rate to use, they will start using that rate from that day onwards for any tax they withhold from your payments.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1520273.

Topics:

Money and consumer rights > Taxes

RE 18B: Capital value increase under inflation-indexed instruments: RWT cap, or

“Maximum tax on inflation-related increases in investment value”

RE 20: Paying RWT, or

“Rules for paying Resident Withholding Tax to the Commissioner”

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

RE 19Choosing other rates

This section applies when a person (person A) is entitled to receive resident passive income other than a replacement payment under a share-lending arrangement.
Person A may notify the person who is required to withhold the amount of tax for the payment to use 1 of the rates set out in schedule 1, part D, clause 3 (Basic tax rates: income tax, ESCT, RSCT, RWT, and attributed fringe benefits).
Despite subsection (1), if person A is a company, they may notify the person making the payment to withhold the amount of tax for the payment at the rate set out in schedule 1, part D, clause 4.
The rate chosen under subsection (2) or (3) applies to amounts of tax withheld from the date on which notice is given.

Compare

2004 No 35 ss NF 2A(1), (3), NF 2D(1), (3)

Notes

Section RE 19 heading: substituted, on 1 April 2010 (applying for the 2010–11 and later income years), by section 109(1) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).
Section RE 19(2): amended (with effect from 1 April 2008), on 29 May 2008, by section 46(a) of the Taxation (Personal Tax Cuts, Annual Rates, and Remedial Matters) Act 2008 (2008 No 36).
Section RE 19(2): amended, on 1 April 2008, by section 562 of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
Section RE 19(3): amended (with effect from 1 April 2008), on 29 May 2008, by section 46(b) of the Taxation (Personal Tax Cuts, Annual Rates, and Remedial Matters) Act 2008 (2008 No 36).
Section RE 19 list of defined terms notice: inserted, on 2 June 2016, by section 74 of the Taxation (Transformation: First Phase Simplification and Other Measures) Act 2016 (2016 No 27).