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Investment Income - what's changing in April 2020

From 1 April 2020, Inland Revenue is making changes that will affect investment income payers and recipients. Investment income includes interest, dividends, PIE income, taxable Maori authority distributions and royalties paid to non-residents.

For payers this means

More frequent reporting of investment income becomes mandatory and must be done electronically. Investment income returns will generally be due by the 20th of the month following the month the income was derived or paid. Some organisations may begin this reporting before 1 April 2020.

  • Reporting will not be required for.
    • nil returns (if no income is paid in a month)
    • resident withholding tax (RWT)-exempt investors.
  • You will need to provide additional information, where held - the date of birth and contact address of the recipient and details of any joint account holders
  • The non-declaration rate increases to 45% for RWT on interest income, when a recipient does not provide their IRD number to the payer.
  • There is no longer a requirement to issue end of year RWT on interest certificates to recipients who have provided their IRD number.
  • An electronic RWT-exempt status register will replace RWT-exempt certificates.
  • Error-correction processes will be improved.
  • Additional record keeping will be required for payment of non-resident withholding tax (NRWT)

Find out more about investment income for payers - external link

Recipients - key things to know and do

  • Give your IRD number to your investment income payer (eg your bank) to make sure you’re on the right tax rate and to avoid the non-declaration rate.
  • IRD will split any investment income reported for an account equally across all the joint account holders who have provided their IRD numbers to their income investment payer. You can change this split in myIR (or on your income tax return).
  • From 1 April 2020, if you hold an RWT exemption certificate you will not need to show it to a payer as your IRD number will be on the new RWT-exempt register.
  • myIR has information on your investment income.

Find out more about New Zealand tax residents with interest and dividends from New Zealand bank accounts and investments at ird.govt.nz (search keywords: interest and dividends).


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