If you pay dividends, interest or royalties to New Zealand non-residents, these are known as non-resident passive income (NRPI). If you make payments that are NRPI you will need to:
- register as a payer
- deduct non-resident withholding tax (NRWT) from these payments, and
- send the deductions to us.
Register as an NRWT payer
Deductions from NRPI are paid to us using the NRWT payment slip (IR67P). Before you can start deducting NRWT, you’ll need to register as a payer.
NRWT double tax agreements
Double tax agreements decide the deduction amount for NRWT. You will need to deduct NRWT at the rate that applies to the area you are sending passive income to.
Areas without double tax agreements
You will need to use higher deduction rates if you:
- send passive income to a person travelling
- send passive income to an area that does not have a DTA with New Zealand
- do not know the area you are sending passive income.
The rates for these areas are:
- 15% for interest and royalties
- 30% for dividends.
Payment, reconciliations, certificates and monthly reporting
You can choose the new investment income reporting requirements and report monthly. If you haven’t taken up the new investment income reporting then you'll need to:
- pay NRWT to us using the NRWT payment slip (IR67P) (how often depends on the amount of NRWT you deduct over the year)
- file your NRWT annual return, this is your NRWT withholding certificates - IR67 and NRWT reconciliation statement - IR67S.
New reporting requirements and your NRWT responsibilities
The new income reporting requirements for each month are voluntary from 1 April 2019. If you choose the new income reporting requirement you do not have to fill in and send to us:
- NRWT withholding certificates (IR67)
- NRWT payment slips (IR67P)
- NRWT reconciliation statements (IR67S)
Starting new investment income reporting during 2019
If you start following the new requirements for investment income reporting during 2019, you’ll only need to send certificates (IR67), payment slips (IR67P) and a reconciliation (IR67S) to cover the period of 1 April to when your started reporting using the new investment income reporting requirments.
Paying deductions to us
The following information only applies if you are not following the new investment income reporting requirements.
Deducting $500 or more NRWT per year
If you deduct $500 or more NRWT each year, the deductions made in each month are due by the 20th of the following month.
Deducting less than $500 per year
If you expect to deduct less than $500 NRWT in a year, you may file and pay on a 6-monthly basis. We’ll send you IR67P’s to cover the following periods:
- 1 April to 30 September payment due on 20 October
- 1 October to 31 March payment due 20 April.
You will need to send deductions in by the 20th of the month if they reach $500. After that you need to file and pay monthly for the rest of the year. You’ll need to contact the Non-resident Centre and ask to do monthly returns.
NRWT and exemptions
Some people or organisations may have a NRWT exemption on their NRPI income from New Zealand. Do not deduct NRWT from someone who gives you a copy of the letter we've given them showing they're exempt.
We give exemptions when:
- income is exempt from tax, including NRWT, 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.