Plain language law

New Zealand law explained for everyone

Income Tax Act 2007

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

RE 30: When unincorporated bodies have RWT-exempt status

You could also call this:

“When groups without a company structure don't have to pay some taxes”

You are part of an unincorporated body that has RWT-exempt status. This means you do not have to pay Resident Withholding Tax on some payments. The body is treated as a single unit for tax purposes.

When the body makes a payment, it is treated as if the body made the payment, not you. If you get a payment as a member of the body, it is treated as if the payment was made to the body, not you. You are responsible for paying any RWT the body owes if you were a member when the body got the RWT liability.

If you die, your estate is responsible for paying any RWT that is still owed. The Commissioner needs to be told if there is a change in the body’s membership. You can find more information about the Taxation Act on the New Zealand legislation website.

If the body’s business is managed by its members, each member is responsible for doing what the RWT rules say. This includes the president, chair, treasurer, and secretary. Only one member needs to take action for the body to comply with the rules.

You can be liable for paying RWT even if you are not the one who manages the body’s business. However, if one member takes action, that is enough. A change in the body’s membership does not affect its RWT liability.

This text is automatically generated. It might be out of date or be missing some parts. Find out more about how we do this.

This page was last updated on

View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1520300.

Previous

RE 29: Establishing whether persons have RWT-exempt status, or

"How to check if someone is exempt from RWT"

Next

RE 31: When limited partnerships have RWT-exempt status, or

"Rules for limited partnerships that don't have to pay some taxes"

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

RE 30When unincorporated bodies have RWT-exempt status

  1. This section applies when—

  2. an unincorporated body that is carrying on a taxable activity has RWT-exempt status; and
    1. the exemption relates to the carrying on of the taxable activity.

      1. This section does not apply to a limited partnership.

      2. For the purposes of the RWT rules, a payment that the body makes in the course of carrying on the taxable activity is treated as a payment made by the body and not by a member of the body. This subsection overrides subsection (7).

      3. For the purposes of the RWT rules, a payment made to a member of the body in their capacity as a member and in the course of carrying on the taxable activity of the body is treated as a payment made to the body and not to the member.

      4. A person is jointly and severally liable for the RWT that the body is required to pay if the person was a member of the body when the body incurred the RWT liability.

      5. For the purposes of subsection (4),—

      6. if the member is a natural person, their estate is liable after their death for an amount payable that remains unpaid:
        1. if the body is a partnership, joint venture, or the trustees of a trust, a member continues as a member until the date the Commissioner is notified of a change of membership.

          1. Subsection (7) applies to an unincorporated body other than a partnership, joint venture, or the trustees of a trust, when the business of the body is managed by the members or a committee of its members.

          2. If something is required to be done under the RWT rules by or on behalf of the body, each member holding office as president, chair, treasurer, secretary, or a similar office is jointly and severally responsible. In default, each member holding office bears the responsibility. Action taken by 1 officer or committee member is sufficient.

          3. If something is required to be done under the RWT rules by or on behalf of the body, each member is jointly and severally liable to do it. However, action taken by 1 member is sufficient. Subsection (7) overrides this subsection.

          4. A change in membership of the unincorporated body has no effect for the purposes of the RWT rules. Subsection (5)(b) overrides this subsection.

          5. In this section,—

            member means a partner, joint venturer, a trustee, or a member of a body.

            Compare
            Notes
            • Section RE 30 heading: amended, on , by section 229(1) of the Taxation (Annual Rates for 2017–18, Employment and Investment Income, and Remedial Matters) Act 2018 (2018 No 5).
            • Section RE 30(1)(a): amended, on , by section 229(2) of the Taxation (Annual Rates for 2017–18, Employment and Investment Income, and Remedial Matters) Act 2018 (2018 No 5).
            • Section RE 30(1B) heading: inserted (with effect on 1 April 2008), on , by section 124(1) (and see section 124(4) for application) of the Taxation (Annual Rates for 2024–25, Emergency Response, and Remedial Measures) Act 2025 (2025 No 9).
            • Section RE 30(1B): inserted (with effect on 1 April 2008), on , by section 124(1) (and see section 124(4) for application) of the Taxation (Annual Rates for 2024–25, Emergency Response, and Remedial Measures) Act 2025 (2025 No 9).
            • Section RE 30(4): replaced, on , by section 124(2) of the Taxation (Annual Rates for 2024–25, Emergency Response, and Remedial Measures) Act 2025 (2025 No 9).
            • Section RE 30(10) partnership and partner: repealed, on , by section 22(1) of the Taxation (Limited Partnerships) Act 2008 (2008 No 2).
            • Section RE 30 list of defined terms limited partnership: inserted (with effect on 1 April 2008), on , by section 124(3) (and see section 124(4) for application) of the Taxation (Annual Rates for 2024–25, Emergency Response, and Remedial Measures) Act 2025 (2025 No 9).
            • Section RE 30 list of defined terms notify: inserted, on , by section 74 of the Taxation (Transformation: First Phase Simplification and Other Measures) Act 2016 (2016 No 27).
            • Section RE 30 list of defined terms RWT-exempt status: inserted, on , by section 229(3)(a) of the Taxation (Annual Rates for 2017–18, Employment and Investment Income, and Remedial Matters) Act 2018 (2018 No 5).
            • Section RE 30 list of defined terms RWT exemption certificate: repealed, on , by section 229(3)(b) of the Taxation (Annual Rates for 2017–18, Employment and Investment Income, and Remedial Matters) Act 2018 (2018 No 5).