Whakatane Accountant

Resident Withholding Tax (RWT)

Resident Withholding Tax (RWT) is a tax deducted on interest earned from investments and bank accounts.  The investment organisation or bank deducts this tax when they credit interest to you.

Companies may also deduct withholding tax from dividends paid to shareholders.

If you receive interest as income you need to:

  • Provide the interest payer with your IRD number, and
  • Elect the tax rate at which this is to be deducted by them

The RWT tax rate used will vary for individuals and different types of business entity.

For more information on RWT, the tax rate and how this tax applies to interest and dividends refer to the IRD website

 

Tax Facts – Tax Credits (formerly Rebates)

Tax credits can be claimed by individuals (not companies, trusts or partnerships) who:

  • Earned taxable income during the period being claimed for; and
  • Were in New Zealand at any time during the tax year (including non-residents)

You may qualify for a tax credit for:

  • Donations made of $5 or more to an approved charity
  • Donations made of $5 or more to state and state integrated schools (note donations do not include tuition fees, payment for voluntary school activities, payments for classes where there is a take-home component or payments for transport to or from school activities)

The tax credit able to be claimed is up to the lesser of 33.33% of the total donation or 33.33% of your taxable income and will require valid receipts.  Tax credits for payments for childcare or a housekeeper have been removed from 1 April 2012.

For further information regarding tax credits, visit the tax credits section of the IRD website.

If you claimed a tax credit in the prior year, the IRD will automatically send you a Tax Credit Claim Form in April each year. Otherwise, click here for the latest version of the IRD 526 Tax Credit Claim Form.

This information relates solely to individuals and individual income tax. There are other tax credits which have been introduced. Please contact our office for more information on these.