IBBZ Accounting

Chartered Accountants & Tax Specialist


Useful tips for Small Business

General update by IBBZ Accounting on latest tax news, business growth and technology tips.

Proposed Solutions to RWT for Small Businesses

on in Tax updates
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RWT on dividends between companies

With amendments being made to sections RE 2(5), this now limits the definition of “resident passive income”. This section excludes fully imputed dividends paid to a corporate shareholder if the paying company chooses to exclude the dividend from the definition.

This will allow a company to opt out of withholding RWT on a fully imputed dividend paid to another company.

The above amendments were needed because of company tax rate being lowered from 33% to 28%. Dividends were effectively overtaxed by the amount of RWT withheld.

RWT on dividends and interest payments made by closely held companies to their shareholders

Currently subject to the attachment of imputation credits, the RWT rate on dividends is a flat 33%. Due to the company tax rate being lowered to 28%, even fully imputed dividends must have RWT deducted.

This leads to over-taxation for individual shareholders who are not on the top personal tax rate. Any excess RWT then needs to be claimed as a refund when the tax return for the relevant income year is filed, which not only means refund delays but also a compliance burden on those individuals who may not otherwise have had to file a return.

Proposed solution

There have been discussions to allow a close company to elect to remove RWT on dividends and interest payments. One possible solution to do this is the company directors providing a guarantee RWT portion shall be paid. In the absence of non-payment, they will be personally liable for the payment. One this proposal is passed, there shall be forms published by the IRD which will allow small business to elect for RWT exemption. This will really help small businesses to declare divided without complication and compliance cost of managing and paying RWT. Recipient will be able to pay the RWT portion of tax via their tax return.

Watch this space for further development on this front


Saurav Wadhwa

Saurav Wadhwa is the Managing Director of IBBZ Accounting. IBBZ Accounting is one of the finest tax consulting firm based in Auckland, New Zealand. IBBZ Accounting has multiple business awards. 
Saurav Wadhwa is Masters in Taxation and Post Graduate in Law. Has dual membership with New Zealand Institute of Chartered Accountants and CPA Australia. He has a passion for Helping New Zealand Businesses. 


Awards and Recognition


As of Aug 2020 total number of 115 businesses saved from tax debt associated problems. Their written testimonials and Google Reviews provides authenticity of these numbers.

2019 IBBZ Accounting was Finalist in two categories: Excellence in Customer Service and Excellence in Business Planning. Westpac Auckland Business Awards

2018 IBBZ Accounting was Finalist in Westpac Auckland Business Awards: Strategy and Business Planning 2018.

2017 Saurav was appointed as a committee member to New Zealand Public Practice Board of CPA Australia. 

2015 Saurav won the award of Best Accountant of the Year.

2014 IBBZ Accounting won the award of Best Small Business 2014. 


News Paper Articles.

Sunday Star Times -Fairfax Media -12-08-2018

InTheBlack Aug 2018 issue - CPA Australia In Practice Publication 


Contact us on info@ibbz.co.nz  or 09 272 8050


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Guest Sunday, 24 October 2021