Debt securities - rates, eligibility, availability of relief etc. - New Zealand

06.03.2015

Withholding Tax

Standard rate of withholding tax:15%Holding requirements / restrictions:Yes

The standard rate of Non-Resident Withholding Tax (NRWT) on interest from all New Zealand debt securities is 15% for beneficial owners that are non-residents of New Zealand.

However, if the debt securities are covered by the Approved Issuer Levy regime, beneficial owners that are non-residents of New Zealand and have requested the Approved Issuer Levy regime to apply may pay the Approved Issuer Levy as an alternative to the NRWT.

As a consequence and subject to submission of the required documentation, New Zealand debt securities are taxed as follows:

Debt securities governed by the Approved Issuer Levy regime:

  • Non-residents requesting the Approved Issuer Levy regime to apply:
    • 0% if the registered security is a government debt security or a “qualified” corporate debt security meeting certain conditions; or
    • 2% for other registered corporate debt securities.

    N.B.: To request application of the Approved Issuer Levy regime, customers must submit the required documentation. If application of the regime is not requested, Approved Issuer Levy-eligible securities will be treated as standard debt securities and the rules for the NRWT regime will apply.
  • Non-residents requesting the NRWT regime to apply on Approved Issuer Levy-eligible securities:
    • 0% for tax-exempt beneficial owners;
    • Double Taxation Treaty (DTT) rate for beneficial owners resident in a DTT country.

Standard debt securities governed by the NRWT regime:

  • 0% for tax-exempt beneficial owners;
  • Double Taxation Treaty (DTT) rate for beneficial owners resident in a DTT country.

Availability of relief

Click on the image to view the diagram showing the availability of relief at source and/or reclaim of withholding tax on income from New Zealand debt securities.

Beneficial owners can obtain exemption at source or relief at source from withholding tax on interest from New Zealand debt securities as follows:

Eligible beneficial ownersRelief at sourceQuick RefundStandard Refund
Residents of Double Taxation Treaty (DTT) countriesYesYesYes
Non-residents of New Zealand requesting the Approved Issuer Levy regime.YesYesYes
Tax-exempt beneficial ownersYesYesNo

Relief at source of withholding tax is available only if the appropriate documentation is submitted to Clearstream Banking.

A quick refund is available if relief at source has not been obtained by a beneficial owner eligible for exemption.

A full standard refund is available if relief at source or a quick refund has not been obtained by a beneficial owner eligible for exemption. The customer can reclaim withholding tax on behalf of the beneficial owner through Clearstream Banking by submitting the appropriate documentation.

Note: New Zealand debt securities may not be held in Clearstream Banking on behalf of beneficial owners that are New Zealand residents for tax purposes. Customers are responsible for ensuring compliance with this restriction.