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New Zealand law explained for everyone

Income Tax Act 2007

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

RF 11B: Dividends paid by companies in certain situations

You could also call this:

“How non-residents are taxed on dividends from NZ companies”

When a company pays a dividend to someone who doesn’t live in New Zealand, the amount of tax they need to pay depends on a few things. If the dividend is fully-imputed, which means the company has already paid tax on it, you don’t have to pay any tax on it if you own 10% or more of the voting rights in the company. You also don’t pay tax if you own less than 10% of the voting rights, but the tax rate would normally be less than 15% without imputation credits.

For the part of the dividend that isn’t fully-imputed, you pay tax at the rate that would apply if there were no imputation credits attached to the payment. This rate is based on tax agreements between New Zealand and other countries.

These rules help figure out how much tax non-residents need to pay on dividends they get from New Zealand companies.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM2802201.

Topics:
Money and consumer rights > Taxes
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“Dividends paid to companies living in two countries”

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

RF 11BDividends paid by companies in certain situations

  1. The rate of NRWT payable on a payment of non-resident passive income in the form of a dividend paid by a company to a non-resident is—

  2. to the extent to which the payment is a fully-imputed dividend, 0% if—
    1. the non-resident has a direct voting interest in the company of 10% or more:
      1. the non-resident does not have a direct voting interest in the company of 10% or more and, in the absence of this section, the post-treaty tax rate for the dividend would be less than 15% if no imputation credits were attached to the payment:
      2. to the extent to which the payment is not a fully-imputed dividend, the post-treaty tax rate for the dividend that, in the absence of this section, would apply if no imputation credits were attached to the payment.

        Notes
        • Section RF 11B: replaced (with effect on 1 February 2010), on , by section 152 of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).
        • Section RF 11B list of defined terms fully imputed: inserted, on , by section 243 of the Taxation (Annual Rates for 2015–16, Research and Development, and Remedial Matters) Act 2016 (2016 No 1).
        • Section RF 11B list of defined terms fully-imputed dividend: repealed, on , by section 243 of the Taxation (Annual Rates for 2015–16, Research and Development, and Remedial Matters) Act 2016 (2016 No 1).