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Income Tax Act 2007

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

RF 6: When amounts of tax not withheld or partly withheld

You could also call this:

"What happens when tax is not paid or only partly paid"

When you do not pay the full amount of tax you need to, the person who should have paid the tax is treated as a filing taxpayer. This happens when a person, called person A, is required to withhold tax under section RA 6(2) but does not pay the full amount. The person who gets the income, called person B, is then treated as a filing taxpayer.

If you get a type of income called a dividend under section GB 1(3), you are also treated as a filing taxpayer. The amount of tax that person A should have paid is a debt they owe to the Commissioner. This debt is treated as being due under section RA 10.

The Commissioner can take steps to get the amount owed from person A or person B. If someone else pays the tax that person B owes, section 165 of the Tax Administration Act 1994 applies.

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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=DLM1520322.

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RF 5: When amounts of tax already withheld, or

"When you don't need to deduct tax if it's already been withheld"

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RF 7: General rate for NRWT, or

"The standard tax rate for non-resident passive income is 15%"

Part RGeneral collection rules
Withholding tax on non-resident passive income (NRWT)

RF 6When amounts of tax not withheld or partly withheld

  1. When a person (person A) is required under section RA 6(2) (Withholding and payment obligations for passive income) to withhold NRWT and does not withhold the full amount required under this Part, the person (person B) deriving the non-resident passive income is treated for this purpose as a filing taxpayer.

  2. A person who derives non-resident passive income that is a dividend under section GB 1(3) (Arrangements involving dividend stripping) is treated as a filing taxpayer.

  3. The amount of tax referred to in subsection (1) as not withheld is a debt payable by person A to the Commissioner, and is treated as having become due under section RA 10 (When obligations not met).

  4. Subsection (2) applies in relation to a non-cash dividend described in section RF 10 as if the amount equal to the amount of tax for the dividend were the amount payable.

  5. In recovering the amount, the Commissioner may take the steps the Commissioner thinks fit in relation to person A or person B, whether or not they are the same person.

  6. Section 165 of the Tax Administration Act 1994 applies if NRWT payable by person B is, in fact, paid by another person.

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Notes
  • Section RF 6(1): amended (with effect on 1 April 2008), on , by section 127(1) of the Taxation (Annual Rates for 2024–25, Emergency Response, and Remedial Measures) Act 2025 (2025 No 9).
  • Section RF 6(1): amended (with effect on 1 April 2008), on , by section 127(2) of the Taxation (Annual Rates for 2024–25, Emergency Response, and Remedial Measures) Act 2025 (2025 No 9).
  • Section RF 6(1B) heading: inserted (with effect on 1 April 2008), on , by section 113(1) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).
  • Section RF 6(1B): inserted (with effect on 1 April 2008), on , by section 113(1) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).
  • Section RF 6(2): amended (with effect on 1 April 2008), on , by section 127(3) of the Taxation (Annual Rates for 2024–25, Emergency Response, and Remedial Measures) Act 2025 (2025 No 9).
  • Section RF 6(4): amended (with effect on 1 April 2008), on , by section 127(4) of the Taxation (Annual Rates for 2024–25, Emergency Response, and Remedial Measures) Act 2025 (2025 No 9).
  • Section RF 6(5) heading: inserted (with effect on 1 April 2008), on , by section 127(5) of the Taxation (Annual Rates for 2024–25, Emergency Response, and Remedial Measures) Act 2025 (2025 No 9).
  • Section RF 6(5): inserted (with effect on 1 April 2008), on , by section 127(5) of the Taxation (Annual Rates for 2024–25, Emergency Response, and Remedial Measures) Act 2025 (2025 No 9).