Dividends & Resident Withholding Tax|
IRD - 20 January 2012
Resident Withholding Tax (RWT) is payable on company dividends at a rate of
33 cents in every dollar of the gross dividend, less any Imputation Credits and Dividend Withholding Payment
Credits attached to that dividend.
In the past, as the company tax rate was also 33 cents in the dollar, imputation credits were able to be attached
at the 33% rate and no additional RWT was payable.
However, since the reduction in company tax rate to 30%, and now 28%, imputation credits are only able to be
attached at a rate of 30 cents in the dollar, and for current and future year tax payments, 28 cents in the dollar.
This creates a shortfall in the tax paid on the dividend and hence, RWT must be paid on the difference, on the 20th
of the month following the dividend payment date.
We can assist you in calculating your dividend payments, imputation credits and RWT payable, please feel free to
contact us to discuss this.
All information is correct at the date of article
publication. Please note we provide the information as a service only. Accordingly, the contents are
not intended as a substitute for specific professional advice and should not be relied upon for that
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