What is withholding tax?
Withholding tax is tax paid on interest earned from interest-bearing accounts such as Term Deposits and Savings accounts. ASB deducts this tax before the interest is paid to you. We then pay this tax to Inland Revenue (IRD) on your behalf.
Find out more about the different types of withholding tax:
There’s also Approved Issuer levy (AIL), which may be paid as an alternative to NRWT.
If your IRD number is included on the IRD’s RWT Exemption Register, then withholding tax may not apply to you.
You should ensure your RWT rate is correct for your level of taxable income. Selecting a rate that is too low may mean you have an end of year tax liability. Selecting a rate that is too high may mean you are paying too much tax. If you are paying too much RWT, you may get a refund at the end of the year from the IRD after assessment of your total taxable income for the year.
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