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If you pay dividends or interest to New Zealand residents, these are known as resident passive income. If you make payments that are resident passive income you'll need to:

Resident passive income

Resident passive income means an amount paid to a New Zealand resident that is one of the following:

  • interest
  • a dividend
  • a taxable Māori authority distribution (other than a retirement scheme contribution)
  • a replacement payment paid to a person under a share lending arrangement.

Under the resident withholding tax rules, resident withholding tax usually needs to be withheld from resident passive income, although there are some exceptions.

Resident withholding tax exemptions

Some people or organisations may have a resident withholding tax exemption when:

  • income is exempt from tax, including resident withholding tax, under New Zealand tax law
  • income is exempt from tax because of any other New Zealand legislation
  • double tax agreements allow for an exemption from tax on certain types of income.

Do not deduct resident withholding tax from someone who has resident withholding tax exemption status. Check the exemption register to see if they have this status.

Resident withholding tax exemption register

Last updated: 29 Jun 2021
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