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What is withholding tax?

Last Updated: 18 Mar 2020

Calculate what Resident Withholding Tax rate you should use.

Withholding tax is tax that is deducted from interest that you earn from ASB Bank. ASB Bank pays this tax to Inland Revenue on your behalf. The types of withholding tax are Resident Withholding Tax (RWT) and non-Resident Withholding Tax (NRWT). Approved Issuer levy may be paid as an alternative to NRWT.

If your IRD number is included on the Inland Revenue's RWT Exemption Register then withholding tax may not apply to you.

What is Resident Withholding Tax (RWT)?

Resident Withholding Tax is the tax deducted on interest paid to New Zealand tax residents on their deposit accounts. 

What is Non-Resident Withholding Tax (NRWT)?

Non-Resident Withholding Tax is the tax deducted on interest paid to non-New Zealand tax residents on their deposit accounts. 

What is Approved Issuer Levy (AIL)?

Approved Issuer Levy is a levy paid by non-New Zealand tax residents on their deposit accounts.

What is the default tax rate? 

If you are a New Zealand tax resident and have supplied your IRD number but not your tax rate, the default rate is 33%. If you have not supplied your IRD number then the non-declaration rate is 45%. If you are a non-New Zealand tax resident the default rate will be the withholding tax rate for your indicated country of tax residence.


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