01 May 1977

Income Tax (Withholding Payments) Regulations1975, Amendment No.1

Archived legislative commentary on the Income Tax (Withholding Payments) Regulations1975, Amendment No.1 from PIB vol 90 May 1977.

This commentary item was published in Public Information Bulletin Volume 90, May 1977

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Labour Only Contractors Including Fishermen

The Income Tax (Withholding Payments) Regulations 1975, Amendment No. 1


New Regulations were recently gazetted which -

  • increase the rate of withholding tax on labour only contracts for carpenters from 10 percent to 20 percent;
  • extend the withholding tax system to -
    • certain other labour only contracts within the building industry;
    • payments made to fishermen;
  • makes a minor drafting amendment in relation to the existing withholding tax provisions on overseas entertainers.

Application Date of Withholding Tax

The Regulations apply with respect to withholding payments made on or after 1 April 1977, notwithstanding that the payments may relate to a period that commenced before that date.

Copies of the new Regulations (SR 1976/306) are available from the Government Bookshop.

Labour Only Contracts

The following labour only contracts are included in the Regulations from 1 April 1977 and gross payments for work done or services rendered in relation to these contracts will also be subject to a withholding tax at the rate of 20 cents in the dollar -

  • fixing of roofs and the fixing of steel
  • erection of fences, laying of concrete, bricks, block, stones, etc
  • painting, plastering, wallpapering and decorating
  • installation of wallboards, fibrous plaster and other interior linings
  • laying of carpets, tiles and other floor coverings


Payments made to fishermen under contracts, arrangements or profit sharing agreements which are for the supply of labour in operating or maintaining any fishing boat, will be subject to withholding tax at the rate of 20 cents in the dollar.

Deduction of Withholding Tax

The withholding tax will be deducted from the gross payments made. With most contracts this will generally be the amount payable for the services rendered. In the case of fishermen where payments are often made on a "share of catch" basis after taking into account a proportionate share of boat operating costs, the withholding tax will be deducted from the actual payments made.

Exemptions From Withholding Tax

These will include payments -

  • of salary or wages or other emoluments from which ordinary PAYE is deducted;
  • made to persons in business on their own account and who pay provisional tax and have a certificate of exemption IR118.
  • made to companies.

ACC Levy

The liability to pay Accident Compensation Levy both by employers and self-employed, as the case may be, will not be affected by the requirement to deduct withholding tax. Who is responsible for the payment of the Accident Compensation Levy in any particular case will continue to depend - as in the past - on whether the contract between the parties is one of service (employee) or for service (self employed).

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.