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Inland Revenue

Tax Policy

Announcements
PUBLISHED 19 August 2010

RWT rates set to come down from 1 October

Resident withholding tax on interest is set to come down from 1 October, when banks will automatically move customers over to new rates which reflect the lower personal income tax rates announced in Budget 2010. For more information see the media statement.


Hon Peter Dunne
Minister of Revenue

Media statement

Dunne: Banks, institutions well set for RWT rates drop

Revenue Minister Peter Dunne today commended the work being done by banks and other financial institutions for the work they have done in readying their systems for the 1 October drop in resident withholding tax rates

Along with personal tax cuts coming into effect on the same day, people have a reduction in withholding tax charged on their interest. Resident withholding tax (RWT) rates will be aligned with the new personal income tax rates.

Resident withholding tax on interest earned is currently charged at the rate of 12.5%, 21%, 33% or 38%.

As part of Budget 2010, the rates will drop on 1 October to correspond with the new lower tax rates: 10.5%, 17.5%, 30% and 33%.

The company RWT rate will be 28% from 1 April 2011, the date the company tax rate decreases, while the RWT rate on interest paid to trusts will remain unchanged at 33%

"Banks will be taking care of moving people over to the new rates automatically, so their customers do not need to do anything" he said.

The new rates will apply to interest actually paid on or after 1 October 2010 regardless of what period it was earned over.

Ends

Mark Stewart | Press Secretary | Office of Hon Peter Dunne
Cell +64 21 243 6985