Section RF 2 — Income Tax Act 2007: Non-resident passive income

RF 2 Non-resident passive income Interest, certain dividends, and royalties (1) Non-resident passive income means income having a source in New Zealand that a non-resident derives and that consists of— (a) a dividend other than an investment society dividend: (b) a royalty: (c) an investment society dividend when the non-resident is not engaged in business in New Zealand through a fixed establishment in New Zealand: (d) interest when the non-resident is not engaged in business in New Zealand through a fixed establishment in New Zealand. Exclusions (2) The following amounts derived by a non-resident are excluded from non-resident passive income: (a) an amount of exempt income: (b) [Repealed] (c) an amount of excluded income under sections CX 56B and CX 56C (which relate to attributed PIE income), as applicable. When subsection (4) applies (3) Subsection (4) applies in an income year when a person derives non-resident passive income consisting of— (a) a dividend other than an investment society dividend: (b) a royalty for the use, production, or reproduction of, or for the right to use, produce, or reproduce, a literary, dramatic, musical, or artistic work in which copyright subsists: (c) interest or a royalty derived by a life insurer from a company resident in New Zealand when the interest or royalty is treated as arising as a result of the life insurer’s election under section EY 49 (Non-resident life insurer becoming resident): (d) interest or an investment society dividend when the person paying and the person deriving the interest or dividend are not associated persons. Final withholding (4) If the person is a filing taxpayer, the schedular income tax liability for the corresponding tax year under section BC 7 (Income tax liability of person with schedular income) for schedular income that is non-resident passive income is determined by the amount of tax required to be withheld under this Part. Exception: minimum amount (5) Despite subsection (4), if a person derives non-resident passive income consisting of interest, investment society dividends, or a royalty other than those described in subsection (3), the person’s income tax liability for the corresponding tax year is the greater of— (a) the sum of the total non-resident withholding tax (NRWT) for which they are liable and the amount that would be their income tax liability for the tax year if they had not derived non-resident passive income in the tax year: (b) the amount that would be their income tax liability in the absence of this subsection. Company deriving minimum amount (6) For the purposes of subsection (5) for a company, if the total amount of non-resident passive income and other income derived by the company in the corresponding tax year is not more than $1,000, the income tax liability of the company for the tax year is the sum referred to in subsection (5)(a). Application of financial arrangements rules (7) The financial arrangements rules do not apply to the calculation of an amount of non-resident passive income. Interest payable by Commissioner (8) For interest payable under Part 7 of the Tax Administration Act 1994, NRWT withheld by the Commissioner is treated as paid on the date it is withheld. Sections 50 , 55 , 100 , and Part 9 of that Act do not apply to the Commissioner and that interest, but the other provisions of the NRWT rules do apply. Defined in this Act: amount , amount of tax , associated person , business , Commissioner , company , dividend , excluded income , exempt income , filing taxpayer , financial arrangements rules , fixed establishment , income , income tax liability , interest , investment society dividend , life insurer , New Zealand , non-resident , non-resident passive income , NRWT , NRWT rules , pay , resident in New Zealand , royalty , schedular income , schedular income tax liability , source in New Zealand , tax year Compare: 2004 No 35 ss NG 1(2)–(4) , NG 3 , NG 4 Section RF 2(1) heading: substituted (with effect on 1 April 2008), on 6 October 2009, by section 531(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34). Section RF 2(1): amended, on 21 December 2010, by section 130(1) of the Taxation (GST and Remedial Matters) Act 2010 (2010, No 130). Section RF 2(2)(b): repealed, on 2 November 2012, by section 149 of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88). Section RF 2(2)(c): added (with effect on 1 April 2008), on 6 October 2009, by section 531(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34). Section RF 2(2)(c): amended (with effect on 1 April 2010), on 21 December 2010 (applying for the 2010–11 and later income years), by section 130(2) of the Taxation (GST and Remedial Matters) Act 2010 (2010, No 130). Section RF 2(2)(c): amended, on 1 April 2010 (applying for the 2010–11 and later income years), by section 531(3) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34). Section RF 2(5): amended (with effect on 1 April 2008), on 6 October 2009, by section 531(4) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34). Section RF 2 list of defined terms derived from New Zealand : repealed, on 21 December 2010, by section 130(3)(a) of the Taxation (GST and Remedial Matters) Act 2010 (2010, No 130). Section RF 2 list of defined terms excluded income : inserted (with effect on 1 April 2008), on 6 October 2009, by section 531(5) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34). Section RF 2 list of defined terms source in New Zealand : inserted, on 21 December 2010, by section 130(3)(b) of the Taxation (GST and Remedial Matters) Act 2010 (2010, No 130).