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Income Tax Act 2007

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

RF 16: Relationship with RSCT rules

You could also call this:

“How RSCT and NRWT taxes work for overseas retirement scheme contributions”

When someone who doesn’t live in New Zealand gets money put into their retirement scheme, the person who puts the money in (called a retirement scheme contributor) has to pay a special tax called RSCT. This is how it works:

The contributor pays the RSCT for the money they put in. They are then treated as if they had taken out some money from the contribution to pay another tax called NRWT. The amount they’re treated as having taken out is whichever is smaller: the RSCT they paid, or the NRWT they would have had to pay on the contribution.

If there’s any RSCT left over after this, it’s dealt with in another part of the law called Section LB 6. This section talks about tax credits for RSCT.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1631071.

Topics:
Money and consumer rights > Taxes
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Part R General collection rules
Withholding tax on non-resident passive income (NRWT)

RF 16Relationship with RSCT rules

  1. This section applies when a retirement scheme contributor makes a retirement scheme contribution for a person who is non-resident and pays RSCT for the contribution.

  2. The contributor is treated as having withheld from the contribution an amount of NRWT equal to the lesser of—

  3. the amount of RSCT paid:
    1. the NRWT payable in relation to the contribution.

      1. Section LB 6 (Tax credits for RSCT) applies to any balance of RSCT paid.

      Compare
      Notes
      • Section RF 16: added, on , by section 544 of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).