How dividend tax works in New Zealand
A New Zealand resident generally includes dividends from New Zealand and overseas companies in taxable income. The shareholder's marginal tax rate applies to the grossed-up dividend, with eligible imputation credits for New Zealand company tax already paid.
New Zealand companies can attach imputation credits at a maximum 28:72 ratio. Resident withholding tax on dividends is generally calculated at 33% of the gross dividend, reduced by attached imputation credits and other relevant credits.
The imputation credit prevents the same New Zealand company profit from being taxed twice in full, but it is not a refundable dividend exemption. A shareholder whose personal rate exceeds the company rate may owe additional tax.
Non-resident shareholders are subject to NRWT rules rather than resident RWT. The domestic rate is commonly 30% for dividends outside a treaty or special imputation relief; treaty-country and fully imputed outcomes can be lower, including 15% or 0% in specific cases.
Tax rates at a glance
- Resident shareholder rate
- 10.5% - 39%Marginal rate
- Resident dividend RWT
- 33%
- Maximum imputation ratio
- 28:72
- Non-treaty dividend NRWT
- 30%
- Fully imputed / treaty outcomes
- Often 0% - 15%
Who benefits most
These profiles tend to benefit most when the rules match their real residence, payroll and business setup.
FoundersInvestorsRetireesHolding companiesCross-border shareholders
Watch out for
- The 33% RWT figure is a withholding mechanism, not necessarily the final tax rate. The final result depends on the shareholder's marginal rate and available credits.
- Imputation credits cannot generally be used by a non-resident as if they were a resident's personal tax credit. NRWT, treaty limits and the dividend's imputation level need to be checked separately.
- Foreign dividends received by a New Zealand resident can have foreign withholding tax, FIF and foreign tax-credit issues in addition to New Zealand income tax.
- A company can distribute profits only after accounting for imputation balances, shareholder continuity, solvency and company-law requirements.
Frequently asked questions
How are dividends taxed in New Zealand?
Residents generally include dividends and attached imputation credits in income and are taxed at marginal rates. RWT is commonly deducted at 33% of the gross dividend, reduced by credits.
What is a New Zealand imputation credit?
It represents New Zealand income tax already paid by the company on the profit being distributed. The resident shareholder uses it to reduce the tax on the grossed-up dividend.
Do non-residents pay New Zealand dividend tax?
Usually through NRWT, often at 30% outside treaty or special rules. Treaty rates and fully imputed or substantial non-portfolio dividends can produce lower or zero withholding in defined cases.