New Resident Withholding Tax Fee for Larger Earnings Earners

New Resident Withholding Tax Fee for Larger Earnings Earners

Tax typewriter

Inland Income have introduced {that a} new resident withholding tax fee for prime earnings earners is now accessible.

In case you are New Zealand resident, earnings that you simply earn from curiosity and dividends has tax deducted “at supply”. Which means that it ought to be tax free when it’s paid to you however solely if in case you have the suggested the financial institution or share register of your appropriate resident withholding tax fee.

The federal government launched a brand new prime marginal tax fee of 39% efficient from 1 April 2021 for people incomes over $180,000.00 every year. Establishments that pay curiosity, reminiscent of banks and finance establishments, have till 1 October 2021 to make the brand new fee accessible for people to make use of.

People, trustees and corporations can now replace their RWT deduction fee to 39% on curiosity, however not on dividends. The RWT fee for dividend funds stays at 33%. The corporate paying the dividend will deduct this quantity earlier than paying you.

Larger earnings earners with curiosity funds ought to examine with their financial institution or finance firm to make sure that the right fee is being utilized. If a decrease resident withholding tax fee is utilized, extra tax might apply at tax time. Now is an efficient time to examine to keep away from disagreeable surprises.

Equally, it’s simply as essential to examine you’re on the right RWT fee to make sure that you’re not overpaying tax. Whereas you’ll be entitled to a refund if that is so, the refund won’t apply till after the tip of the tax 12 months on 31 March.

Extra info is out there on the Inland Income web site right here.

Leave a Comment

Your email address will not be published.