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LETS GET DOWN TO BUSINESS.

Question :
helloI have just deiced to take off and create my own business I have manged to become GST registered today , and have been dealing with the banks , and have hit a point where iv been scratching my head .I have been asked by the banks to set my Residential withholding tax , they gave me 3 options 28% 30% 33% and 45% I have been trying to read up about withholding tax but still cant seem to get my head around it all .

Question submitted 11/11/20 @ 09:10pm
Industry: Funding & Finance
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    Kia Ora,
    Depend on the structure of your business. If it’s for companies-under the new rules from 1 April 2020, if you have not provided your IRD number to your bank, tax will be deducted from your interest payments at 45%.
    If you’ve provided your IRD number and company status to the bank, you may use either the 28% or 33% rate (Most companies-28% or Trusts and trustees – any income the trust earns-33%). If you do not choose a resident withholding tax rate, tax will be deducted from your interest payments at 28%.
    If the resident withholding tax rate you choose does not match your income tax rate you may receive an end of year tax bill. If you do not choose a resident withholding tax rate, tax will be deducted from your interest payments at 33%.
    For information on your business income tax obligations, best to talk to your accountant or tax advisor. Hope this helps. Wish you all the best.

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