If you're paying more than $5,000 a year in interest, you must register as a resident withholding tax (RWT) payer. You'll need to do this when:
- you pay the interest as part of a taxable activity, for example as a trade, profession, business, or as a non-profit body or local authority
- we've issued you a certificate of exemption from resident withholding tax
- you're a non-resident carrying on a taxable activity in New Zealand through a fixed establishment.
We automatically register all companies as dividend RWT payers.
When you pay interest over the $5,000 threshold
You do not have to account for RWT on interest paid under $5,000 over the year. Once you're registered you need to account for RWT tax on all interest you pay. However, you do not need to account for any RWT on the interest you paid before reaching the $5,000 threshold.
Registering when you have an RWT exemption
Banks, building societies and trustee companies who have an RWT exemption must register as resident withholding taxpayers. It does not matter how much resident passive income they pay in a year.
If you're an individual with an RWT exemption and your income is (or is estimated to be) more than $2 million for any year, you must register as a payer if you pay out any resident passive income.
Check the register to see if you have an RWT exemption.