A focus on topical tax issues - September 2018
IRD guidance on withholding tax for non-resident directors fees
Inland Revenue has issued a draft interpretation statement which sets out when withholding tax is required to be withheld from fees paid to directors who are not resident in New Zealand. When finalised, it will complete the guidance on the treatment of directors’ fees. Guidance was released in 2017 on payments of fees to resident directors (refer IS 17/06) which left the issue of how to deal with fees paid to non-resident directors hanging. This is an area where it is necessary for the business engaging a non-resident director to know and understand when it has a withholding tax obligation.