What is withholding tax?
Withholding tax is tax that's deducted from interest you earn on your Kiwibank accounts. Types of withholding tax include Resident Withholding Tax (RWT) and Non-Resident Withholding Tax (NRWT). We pay the withholding tax we deduct from interest you earn directly to Inland Revenue.
RWT is tax that's deducted from interest you earn if you're a New Zealand tax resident. If RWT applies to you and you have provided your IRD number to us, you can choose the RWT rate you would like us to use - for more information, visit ird.govt.nz. If we don't have your IRD number, any interest earned on your accounts will be deducted at the non-declaration rate of 45%. You can check or add your IRD number through our mobile app or internet banking. If you don't know your IRD number or need to apply for one, visit ird.govt.nz, or call IRD on 0800 227 774.
If you've provided us with your IRD number, you won't be sent an end of year RWT certificate from us. Information about your interest earned is available on your myIR account. If you haven't provided us with your IRD number, we'll still provide you with a tax certificate. If you'd like an RWT certificate from us, you can request one by contacting us on 0800 113 355 or from overseas +64 4 473 1133.
If you have RWT-exempt status, this will be shown on an online register on Inland Revenue’s website. If Inland Revenue issued you an RWT exemption certificate previously, you should automatically appear on the register (unless your exemption has been cancelled, expired or been revoked). We'll continue to treat you as RWT exempt if you've already provided us a copy of your exemption certificate and you appear on the exemption register.
If you've recently received an RWT-exempt status from Inland Revenue and would like us to apply the exemption to your accounts, you can call us on 0800 113 355 or from overseas +64 4 473 1133. You'll need to provide your IRD number so we can confirm your exemption status against the register before applying the exemption. If you don't appear on the register, we won't be able to apply exempt status to your account.
NRWT is tax that's deducted from interest you earn if you're not a New Zealand tax resident. The NRWT rate will depend on the country of tax residence that you advise us.
If you're a non-resident, you can choose to have Approved Issuer Levy (AIL) deducted instead of NRWT. Learn more about AIL at ird.govt.nz.
What is Prescribed Investor Rate (PIR)?
If you have a Notice Saver, PIE Term Deposit, PIE Online Call or a KiwiSaver account you'll have a Prescribed Investor Rate (PIR) – this is the rate of tax you pay on PIE income earned and may be different to your resident withholding tax (RWT) rate.
We can’t give you tax advice, so we can’t tell you which PIR you should select. It’s your responsibility to choose your PIR and let us know any changes.
The information below is intended as a general guide only. For tax advice relating to your specific circumstances, you should contact Inland Revenue or a tax professional.
When you sign up for a PIE account such as a PIE Term Deposit, Notice saver and PIE Online Call, you need to make sure you select the correct PIR. Depending on your circumstances, your PIR will be 0%, 10.5%, 17.5% or 28%. If you don’t select a PIR, you'll be taxed at the default rate of 28%.
If you need help working out your PIR, take a look at IR website.
From time to time, Inland Revenue may advise us to change your PIR if they identify that you’re on the wrong rate. If this happens, we'll notify you. If you believe Inland Revenue hasn't given us the correct PIR, you can change your PIR subsequently. You'll need to contact Inland Revenue to discuss why you believe their information is incorrect.
New Zealand individuals
If you're an individual New Zealand tax resident and the PIR you’ve provided is incorrect, any under or overpaid tax on your PIE income will be included in your end-of-year tax assessment. This means if your PIR was too high Inland Revenue will refund any overpaid PIE tax (or utilise it against your tax liability on other income) or, if your PIR was too low you’ll need to pay any PIE tax shortfall.
New Zealand entities
If you're a New Zealand tax resident company, unit trust, superannuation scheme or charity, your PIR is generally 0% and you may need to pay tax on your PIE income yourself.
New Zealand trusts and non-residents
If you're a New Zealand tax resident trustee (other than a charitable trust) or not tax resident in New Zealand, you should seek independent tax advice to help you choose the correct PIR.
Working out your PIR (individual & joint investors1)
Your PIR will depend on your worldwide income for the last two income years. Generally, an income year runs from 1 April to 31 March. You can find your previous years' PIE income on your PIE tax certificate.
|
If in either of the last two income years: |
Your PIR will be: |
|---|---|
|
10.5% |
|
17.5% |
|
28% |
If your income calculation above for each of the last two income years results in two different PIRs, you can choose the lower PIR for the current year.
Joint account holders are treated as one account holder and the PIR applied to the account is the highest PIR of any joint account holder.
1 Excludes individuals who are a trustee of a trust. If you're investing as a trust, company, charity, incorporated society or other form of entity please refer to ird.govt.nz or seek advice from a tax professional.
How to check or update your RWT / PIR
You can do this using our mobile app, internet banking or by giving us a call. Contact your KiwiSaver provider to check or update your KiwiSaver account PIR.
Mobile app
- Log in to our mobile app
- Click on 'More' then 'Settings'
- Click on 'Personal Details'
- Click 'Tax Details' – check or update your RWT/PIR.
Internet banking
- Log in to internet banking
- Click on 'Settings'
- Click on 'Personal Details'
- Click 'Tax Details' – check or update your RWT/PIR.
No internet banking or mobile app access?
- Check your statements to see what PIR is used for your end of month interest – if this is correct you don’t need to contact us.
- To make changes, call us on 0800 113 355 or from overseas +64 4 473 1133 between:
- Mon - Thu: 7am - 9pm
- Fri: 7am - 8pm
- Sat - Sun: 8am - 4:30pm.
Standard terms and conditions
This communication contains general information only and isn't investment or tax advice, as such you shouldn't rely on it as the sole basis for any financial decision. Potential investors should seek professional advice as to whether an investment is right for them, including the taxation implications of investing in an investment.
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