RF 12BInterest derived jointly with residents

1. If a person makes a payment of non-resident passive income that consists of interest derived by 2 or more persons jointly and at least 1 person deriving the interest is a New Zealand resident, the amount of tax for the payment is calculated using the formula—

   $(tax\; rate\; \times \; (interest\; paid\; +\; foreign\; withholding\; tax))\; -\; foreign\; withholding\; tax.$

   Where:

2. In the formula,—

3. tax rate is the basic rate set out in schedule 1, part D, clause 3 or 4 (Basic tax rates: income tax, ESCT, RSCT, RWT, and attributed fringe benefits):
4. interest paid is the amount of interest paid before the amount of tax is determined:
5. foreign withholding tax is the amount of foreign withholding tax paid or payable on the amount of interest paid.

6. For the purposes of this section, the New Zealand resident referred to in subsection (1) is treated as a filing taxpayer.

7. Interest derived by 2 or more persons jointly includes interest derived by partners in a partnership.

8. Despite subsection (1), this section does not apply to a payment of non-resident passive income that consists of interest derived by a non-resident as a limited partner in a limited partnership when 1 or more of the partners in that partnership is a New Zealand resident.