Section RE 4 — Income Tax Act 2007: Persons who have withholding obligations

RE 4 Persons who have withholding obligations Requirements (1) A person referred to in section RE 3(1)(a) must meet at least 1 requirement of each of subsections (2) and (3) in relation to a payment of resident passive income. Requirement for person (2) The person must be, at the time the payment is made,— (a) resident in New Zealand; or (b) if not resident in New Zealand,— (i) carrying on a taxable activity in New Zealand through a fixed establishment in New Zealand; and (ii) not excluded under subsection (4). Requirements for person and payment (3) In addition to meeting a requirement of subsection (2), 1 of the following requirements must be met at the time the payment is made: (a) the person holds an RWT exemption certificate: (b) the payment is made in whole or in part in carrying on a taxable activity, whether or not the person acts as agent or trustee for another person: (c) the payment is a dividend: (d) the payment is a taxable Maori authority distribution: (e) the payment is a replacement payment under a share-lending arrangement. When person not treated as resident or carrying on taxable activity (4) For the purposes of subsection (2), a person who is not resident in New Zealand and is carrying on a taxable activity in New Zealand through a fixed establishment in New Zealand, is treated as not meeting the requirements of the subsection if they establish that, at the time the payment is made,— (a) either,— (i) for interest or a dividend, the payment is attributable to or effectively connected with a fixed establishment of the person outside New Zealand; or (ii) for a dividend, the company is not resident in New Zealand; and (b) all amounts payable in relation to money lent or shares to which the payment relates are payable in a currency other than New Zealand currency. Currency conversion (5) A person who is required to withhold RWT in relation to a payment of resident passive income that is in a currency other than New Zealand currency may withhold and pay the amount of the RWT in the foreign currency. Conversion rates: credit (6) For the purposes of subsection (5), in the calculation of the amount of RWT to be credited against income tax, the amount must be converted to New Zealand currency at the option of the person deriving the resident passive income at either— (a) the close of trading spot exchange rate on the day the RWT is paid; or (b) an exchange rate specified by the Commissioner for this purpose in relation to the month in which the RWT is paid. Conversion rates: payment (7) For the purposes of subsection (5), in the calculation of the amount of RWT to be paid to the Commissioner, the amount must be converted to New Zealand currency either at— (a) the close of trading spot exchange rate on the first working day of the month after the month in which the day the RWT is withheld; or (b) a conversion rate applying under section OB 60(6) (Imputation credits attached to dividends) if the resident passive income is a dividend and the person required to withhold RWT under subsection (5) is an Australian ICA company that chooses to use that rate. Defined in this Act: amount , Australian ICA company , close of trading spot exchange rate , Commissioner , company , dividend , fixed establishment , income tax , interest , money lent , New Zealand , pay , replacement payment , resident in New Zealand , resident passive income , RWT , RWT exemption certificate , share , share-lending arrangement , taxable activity , taxable Maori authority distribution , trustee , working day Compare: 2004 No 35 s NF 2(3), (4) Section RE 4(6): amended (with effect on 30 June 2009), on 6 October 2009, by section 527(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34). Section RE 4 list of defined terms FDP : repealed (with effect on 30 June 2009), on 6 October 2009, by section 527(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).