Income Tax Withholding Payments Regulations 1975

This commentary item was published in Public Information Bulletin Volume 83, April 1975

More information about Public Information Bulletins.

Introduction

New Regulations were recently gazetted which consolidate and extend the existing withholding payments regulations. The following are now included in the withholding tax system -

Non-Resident Entertainers And Sportsmen

Payments made on or after 1 April 1975 by agents and entrepreneurs to visiting overseas entertainers and sportsmen are subject to withholding tax at the rate of 20 cents in the dollar. Overseas promoters who provide the services of the entertainer or sportsman will also be subject to the withholding tax. The withholding tax is to be deducted by the agent or entrepreneur from the gross payments and in those cases where the payments are the only income derived from New Zealand, the non-resident entertainer or sportsman need not furnish a return and the withholding tax will be final. However, where the withholding tax deducted is considered by the taxpayer to be excessive, he may elect to furnish a return of income and tax will then be assessed at annual rates on the net income.

The kinds of activities which are subject to the withholding tax include any activity or performance in connection with -

• any sporting event or competition including motor racing, motor car rallies, motor cycle racing, motor boat racing, horse racing or trotting,
• lectures, speeches, or talks,
• performances by actors, entertainers, musicians, singers, dancers, comperes or other artistes whether alone or in choirs, choruses, bands, orchestras, ballets or other entertainment groups.

The above activities also include performances or appearances on television, radio or any film.

Activities Exempt From Withholding Tax

Payments in respect of the following activities or performances will be exempt from withholding tax -

• cultural programmes sponsored by an overseas government or the Government of New Zealand,
• programmes of a foundation, trust or organisation which exists for the promotion of any cultural activity provided it is not carried on for private pecuniary profit,
• any game or sport where the participants are the official representatives of an association, league, union, or other body which administers the game or sport in an overseas country.

Applications for exemption should be sent to the Auckland Tax Office.

Relief Provided Under Certain Double Taxation Agreements

Double taxation agreements in existence with Canada, Sweden and the USA may in certain circumstances grant relief from New Zealand tax on the income of non-resident entertainers. Where an overseas entertainer is a resident of one of these countries our Auckland Tax Office will be glad to advise on the liability for New Zealand tax. Other double taxation agreements in existence do not affect New Zealand's right to tax the non-resident entertainer or sportsman.

Tax Deduction Certificate IR13

This form is to be used when making deductions of withholding tax. The tax deductions are to be paid into any tax office or post office with savings bank facilities by the 20th of the following month. Payment should be made on form IR66N.

Returns For Non-Resident Entertainers To Be Sent To Auckland Tax Office

The Auckland Tax Office will continue to deal with tax returns of non-resident entertainers.

Copies of the new Regulations (SR 1975/48) are available from the Government Bookshop.

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