For payments made to customers from 1 April 2020 you must provide us more detailed investment income information more frequently. You can apply these new reporting requirements now voluntarily. On 1 April they become mandatory.
You must file in an electronic format. There are 3 ways to do this:
- myIR Secure Online Services
- File upload
- Gateway services
You will be required to provide more detailed information about the payee, in particular:
- date of birth of the payee
- contact address
- details about joint account holders.
Reporting will not be required for:
- nil returns (if no income is paid in a month)
- resident withholding tax (RWT) exempt investors.
The non declaration rate increases to 45% for RWT on interest income when the payee does not provide their IRD number to the payer.
Some payers are not required to withhold tax on interest paid. No tax needs to be withheld if the interest paid:
- is not on funds used to generate taxable income
- the amount of interest paid to generate taxable income is less than $5,000.
Some administrative changes have also been made including:
- removing the requirement to provide some end of year withholding tax certificates
- introducing an electronic resident withholding tax exempt status register
- improved error correction processes
- additional record keeping requirements for non resident withholding tax (NRWT).
From 1 April investment income reporting will be due by the 20th of the month following the month the income was paid.
For the tax years ending 31 March 2019 and 31 March 2020
Payers of income subject to RWT and NRWT, apart from royalties, are to report the currently required year end information by 15 May, instead of 31 May. This is a transition measure until more frequent reporting becomes mandatory from 1 April 2020.
A multi rate portfolio investment entity (PIE) that is not a superannuation fund or retirement savings scheme will be required to report investment income information to us annually by 15 May after the end of the tax year. Detailed information relating to investors is only required on an annual basis.
When the changes come into effect
- Mandatory to collect IRD numbers for PIE investments.
- All new PIE accounts opened from 1 April 2018.
- Voluntary investment income reporting on a monthly basis. First monthly return is due by 20 May 2019.
- RWT on interest and NRWT annual certificate returns to be submitted earlier. Annual returns due by 15 May 2019.
- Multi-rate PIE annual returns (IR853 and IR854) to be submitted earlier. Now due annually on 15 May.
- Mandatory investment income reporting on a monthly basis. First monthly return is due by 20 May 2020.
- Final annual RWT on interest and NRWT reconciliation return. Annual returns due by 15 May instead of 31 May.
- Non declaration rate of RWT on interest set at 45% applies to all interest paid from 1 April 2020.
- Electronic exemption register process available, currently planned for 1 April 2020.
What is not changing
The due date for paying withholding tax remains the 20th of the month following the month in which the tax was withheld.
Current legislation allows withholders to pay resident withholding tax in 2 six-monthly instalments if the amount of resident withholding tax is under $500 a month.