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RF 12J: Treatment of certain payments made under indirect associated funding arrangements
or “How tax applies to payments in complex lending arrangements”
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“How to pay NRWT when you don't expect to withhold $500 or more in a year”

When you estimate that you won’t need to hold back $500 or more in total NRWT (non-resident withholding tax) for a tax year, you can pay the amount you’ve held back in two parts.

If you reach the $500 limit during the tax year, you need to pay the tax department in a specific way. You must pay the amount you’ve held back from the start of the tax year to the end of the month when you reach $500. After that, you need to pay the tax every month for the rest of the tax year.

This rule is part of the NRWT rules, which are about tax for non-resident passive income. Passive income is money you earn without actively working for it, like interest or dividends.

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

RF 13Basis for payment of amounts of tax for non-resident passive income

  1. This section applies when a person estimates for a tax year that they will not be required by the NRWT rules to withhold total NRWT of $500 or more.

  2. The person may pay to the Commissioner the amount withheld for the tax year in 2 instalments.

  3. If the threshold amount of $500 is reached at a time in a tax year, the person must pay to the Commissioner—

  4. the amount of tax withheld from the start of the tax year to the end of the month in which the threshold is reached; and
    1. for the remainder of the tax year, the amount of tax on a monthly basis.

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