Under $50,000: tax on your foreign dividends
Below the threshold the FIF rules do not apply. Your foreign dividends are ordinary income, taxed at your rate, less a foreign tax credit.
Below $50,000 your foreign dividends of $1,200.00 are ordinary income. NZ tax on them is $360.00; the foreign tax credit is $180.00, leaving $180.00.
| Gross dividends | $1,200.00 |
| Your other taxable income | $70,000 |
| Tax band | Rate | Income in band (whole dollars) | Tax |
|---|---|---|---|
| $53,500 to $78,100 | 30% | $1,200 | $360.00 |
| Tax on this income | $360.00 | ||
| Foreign tax withheld | $180.00 (our estimate) |
| Less foreign tax credit | −$180.00 |
| Tax to pay | $180.00 |
Your IR3 return
| Box 17B: total overseas income | $1,200.00 |
| Box 17A: overseas tax paid (as a credit) | $180.00 |
- Tax is worked out on whole dollars: IRD drops cents from taxable income, as on the IR3.
- Gains on sale are only taxed if you hold the shares on revenue account (for example, bought to sell) (IR461 p9).
- US dividend tax is 15% for NZ residents with a W-8BEN (NZ and US treaty Article 10(2), 2008 protocol) and 30% without (IRS instructions for Form W-8BEN). Only 15% can be credited.
- The UK takes no tax from most dividends, and any UK dividend tax is not creditable (IR461 p20).
- Australian franking credits cannot be claimed in New Zealand (IR461 p20).
Worked example shown. Change any figure to see your own result (needs JavaScript).
Questions people ask
Do I need to file an IR3 if I only have foreign dividends?
Usually yes: foreign dividends are not fully taxed at source, so you report them in Question 17 of the IR3, unless your platform deducted NZ RWT that covers your rate.
Why is my US tax 30%?
Without a W-8BEN, US payers withhold 30% (IRS instructions for Form W-8BEN). The NZ and US treaty caps US tax on your dividends at 15% (Article 10(2), 2008 protocol), and only that much can be credited.
Calculators
Every FIF tool
Your FIF tax for the year
Holdings in, the $50,000 test, FDR and CV side by side, the lower allowed method, tax and your IR3 boxes.
Open →The $50,000 test
Cost, not market value, on any day of the year. Couples, joint holdings, trusts and the 4-year look-back.
Open →Fair dividend rate calculator
5% of your 1 April value plus the full quick sale adjustment, with last in, first out matching.
Open →Comparative value calculator
Closing value plus sales and dividends, less opening value and purchases, with the loss floor and the method choice.
Open →IRD exchange rates for FIF
Inland Revenue’s end-of-month, mid-month and rolling 12-month rates, with a converter.
Open →Is this a FIF?
ASX shares, NZ PIE funds, employee shares, foreign super, crypto: in or out of the rules.
Open →New to New Zealand
Your transitional resident end date, and the revenue account method if you qualify.
Open →Overseas shares or an NZ PIE fund
The same money taxed both ways, side by side. Figures only, no recommendation.
Open →Is the threshold $100,000 yet?
No. Dated status of the lapsed bill, and the proposal on your own figures, marked NOT LAW.
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