These proposals affect you if you earn income from interest, dividends, a portfolio investment entity (PIE) or a Māori authority, and affect people and organisations paying these types of income to investors. The main proposals are:
- Payers of investment income will be required to provide Inland Revenue with information about individual taxpayers in the month following the month in which the income is paid. Information about individual taxpayers would include:
- the amount of income paid;
- the amount of tax withheld (if any), and any imputation or Māori authority credits attached;
- the customer’s IRD number (if held);
- the customer’s name and address, and date of birth (if held);
- information on each owner if the investment is jointly held;
- for approved issuer levy payments, details of relevant customers;
- for interest exempt from withholding tax, details of relevant customers.
- Payers of interest won’t have to provide end of year tax certificates to their customers who have provided them with their IRD number.
- The “non-declaration rate”, the rate that applies to a taxpayer who doesn’t declare their IRD number, for RWT on interest and PIE tax will be increased to 45%.
- A database of taxpayers holding certificates of exemption from withholding tax will be created.
- Recipients of investment income who claim an exemption from withholding tax will be required to obtain a certificate of exemption.
Proposals that the Government decides to go ahead with would be included in legislation to be introduced in 2017. The application date would allow sufficient time for system changes.