Income Tax Act 2007

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

RE 14B: Combined cash and non-cash dividends

You could also call this:

"How tax works for dividends that are a mix of cash and other things"

You have to follow some rules when you get a combined cash and non-cash dividend. This happens when you have chosen to do something in accordance with sections RE 13(1B) and RE 14(1B). The amount of tax you must pay is calculated using a formula. You use the formula to work out the tax for the cash and non-cash dividend. The formula is: (tax rate × (dividends + tax paid or credit attached)) − tax paid or credit attached. The tax rate is set out in schedule 1, part D, clause 5. The total amount of the cash and non-cash dividend is treated as one payment. You must pay the amount calculated under the formula. This amount is withheld from the combined dividend and paid under the RWT rules.

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This page was last updated on 29 January 2026 — View changes

Topics:

Money and consumer rights > Taxes

RE 14: Non-cash dividends other than certain share issues, or

"Tax on non-cash payments, like goods or services, instead of money"

RE 14C: Non-cash dividends distributed through intermediaries, or

"Rules for foreign companies passing non-cash dividends through other groups"

Part RGeneral collection rules
Withholding tax on resident passive income (RWT)

RE 14BCombined cash and non-cash dividends

This section applies when a person has made an election in accordance with sections RE 13(1B) and RE 14(1B) and the amount of the cash dividend paid at the same time as the non-cash dividend is equal to or greater than the amount calculated by the formula in subsection (2).
The amount of tax for the payment of the cash dividend and the non-cash dividend that the person must withhold and pay to the Commissioner is calculated using the formula—
$(tax rate × (dividends + tax paid or credit attached)) − tax paid or credit attached.$

Where:
In the formula,—
tax rate is the basic rate set out in schedule 1, part D, clause 5 (Basic tax rates: income tax, ESCT, RSCT, RWT, and attributed fringe benefits):
dividends is the total amount of the cash dividend and the non-cash dividend paid before the amount of tax is determined:
tax paid or credit attached is the total of the following amounts:
1. if a dividend is paid in relation to shares issued by an ICA company, the total amount of imputation credits attached to the dividends:
2. if a dividend is paid in relation to shares issued by a company not resident in New Zealand, the amount of foreign withholding tax paid or payable on the total amount of the dividends.

The total amount of the cash dividend and the non-cash dividend is treated as 1 payment of 1 dividend (the combined dividend), and the amount calculated under the formula in subsection (2) is the amount that is required to be withheld from the combined dividend and paid under the RWT rules.

Notes

Section RE 14B: inserted, on 1 April 2017, by section 268 of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 (2017 No 14).