The Inland Revenue Department have just released their new Resident Withholding Tax (RWT) on interest - payer's guide IR283 for RWT rates that came into effect on 1 October 2010, coinciding with the reduction in personal tax rates.
A summary of the new rates are:
|Rate for deducting RWT||Who should use this rate|
- Individuals who have a reasonable expectation of their annual income being $14,000 or less* if they’ve provided their IRD number.
- Testamentary trusts may elect this rate if they provide their IRD number.
- Individuals whose annual income is from $14,001 to $48,000* if they’ve provided their IRD number.
- Individuals, Mäori authorities and trusts who have not elected a rate but have provided their IRD number (if they have not opened a new account since 31 March 2010).
- Trusts and testamentary trusts may elect this rate if they’ve provided their IRD number.
- From 1 April 2011 companies may elect this rate if they’ve provided their IRD number.
- Companies that elected 33% or were moved to the 30% rate by 31 March 2011 will have RWT deducted at 28% from 1 April 2011.
- Individuals whose annual income is from $48,001 to $70,000* if they’ve provided their IRD number.
- Trusts and Mäori authorities can elect this rate if they’ve provided their IRD number.
- Companies may use this rate if it is offered by the interest payer and the company has provided their IRD number.
- From 1 April 2011 this rate will no longer be available to companies.
- All interest recipients can elect this rate, eg, individuals whose annual income is $70,001 or over*.
- Use this rate for all interest recipients who open a new account after 31 March 2010 who don’t elect a rate.
- For all interest recipients this is the rate of RWT where an IRD number is not provided.
* You are not required to confirm an individual’s income level; you can accept the rate they provide.
We would strongly suggest you download the complete IR 283 and read it in conjunction with the above rates.
You should contact your Authorised Intersoft Dealer to assist in implementing the new rates.