IR3NR Non-resident passive income

NRWT

NRWT is deducted from a non-resident’s New Zealand income. The types of income (non-resident passive income) and the maximum rates of NRWT are:

• dividends 30%

• interest 15%

• royalties 15%.

Expenses can’t be claimed against non-resident passive income.

Non-resident passive income has been extended to include non-resident financial arrangement income (NRFAI). NRFAI applies in certain circumstances where there is a financial arrangement between related parties.

Further information is available on the Inland Revenue website www.ird.govt.nz in Tax Information Bulletin (TIB) Vol 29 No 5.

If you’re a non-resident and have a “fixed establishment” in New Zealand, interest isn’t liable for NRWT but you have to include it in your return. A fixed establishment is a fixed place where a non-resident has a business, such as a shop, farm or factory. It doesn’t include property that produces rental income only.

New Zealand has double tax agreements (DTAs) with a number of countries. These agreements may allow for different rates—you can check the rates on the Inland Revenue website www.ird.govt.nz (search keywords: NRWT rates).

If you need more information you can check NRWT on the Inland Revenue website or contact Inland Revenue.

Use the “other countries” rates if:

• the country you live in isn’t on the list

• you don’t know your country of residence

• you have no country of residence.

You don’t need to send in a return if:

• your only New Zealand income was from interest, dividends or royalties, and

• NRWT has been deducted at the correct rate, or

• If your interest income has been zero-rated under the approved issuer levy (AIL) rules. See Approved issuer levy (AIL) for details.

If you aren’t sending in a return, please write to Inland Revenue so they can record that:

• NRWT/AIL has been deducted correctly, or

• you’re no longer a non-resident, or

• you no longer receive any New Zealand-sourced income.

This will save Inland Revenue from contacting you later. Remember to write your name and IRD number on the letter.