Withholding Tax

Withholding Tax (WHT) is tax withheld by a company when making a payment to a vendor, in which the full amount owed to that vendor is reduced by the tax withheld. The withheld tax is then remitted to tax authorities during the next Business Activity Statement (BAS) submission.

The New Zealand government requires taxes to be withheld from payment to vendors under the following circumstances:

Fields within WHT Business Posting Groups and WHT Product Posting Groups must be set up on the WHT Posting Setup page so that the correct WHT calculations are made for each vendor.

In New Zealand, WHT is not calculated if the individual invoice amount is less than or equal to the threshold amount. Companies should select Less than or equal to.

WHT for Suppliers Without an IRD

Ensure that there is a valid combination of General Business and General Product Posting Groups with the correct threshold. For example, in New Zealand today the minimum threshold is $75 with a rate of 46.50%.

The percentage withheld is specified in WHT Posting Setup. The amount to be withheld is calculated automatically at the time of payment. The WHT certificate is printed automatically, and then sent to the vendor with payment. The WHT certificate explains the reasons for not sending the full invoiced amount.

WHT for Foreign Suppliers

Ensure that a valid combination of General Business and General Product Posting Groups has been established for vendors for whom you need to withhold tax,other than for non-IRD.

See Also

Set Up Withholding Tax
Set Up Vendors Without IRD for Calculating the Withholding Tax
Set Up Revenue Types for Withholding Tax
Calculate and Post Withholding Tax Settlements
View Withholding Tax Entries
New Zealand Local Functionality



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