It is important that you choose the RWT rate appropriate to your level of taxable income. This ensures that the correct amount of tax is deducted. If you choose a rate that is too low, you will have a tax bill to pay at the end of the income year and there is really no need for this.
What is RWT?
Resident withholding tax (RWT) is a tax deducted from a New Zealand tax resident customer’s interest income before they receive it.
Where it is identified that you are using a rate that is not consistent with your marginal tax rate you need to advise your interest payer (banks and other financial institutions) to change your rate. You also need to make sure your interest payer has your IRD number.
RWT is deducted from interest on the day the interest is paid, regardless of when the interest was earned. So if interest is paid on or after 1 April 2015, it will be liable for RWT at the current rates (see our table below).
If it is not clear which rate you should be on you are more than welcome to give Tracey Harper a call on 09 273 3682 and she will assist you.
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