Think of RWT as a tax payment made in advance. The Income Tax Act 2007 generally requires RWT to be deducted from dividends paid to New Zealand tax residents. In some cases, New Zealand companies must deduct Resident Withholding Tax (RWT) before paying your dividend and pass it on to Inland Revenue.
đ¨ Important: There are some exemptions from RWT on dividends. Refer to Inland Revenue's guidance for information about whether an exemption may apply.
The amount deducted is usually available as a tax credit when your tax position is calculated, so it's generally not an extra tax on top of what you already owe.
đĄ Note: Invest Direct cannot provide tax advice. If you're unsure how RWT applies to your situation, we recommend speaking with an independent tax adviser or accountant.